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1 We bring the spirit of Iceland to the world Q3 2025 Financial Results l 23 October 2025 Bogi Nils Bogason, President and CEO Ívar S. Kristinsson, CFO
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2 up by 5% from last year Record passenger revenue USD 522m improving by USD 107 million year-on-year Strong liquidity USD 503m with negative currency development the largest contributor CASK increasing by 6% currency impact on cost USD 15m Negative currency effect on EBIT USD 10m revenue increased but costs were adversely affected by several factors EBIT USD 74m decreasing by USD 12m year-on-year Net profit USD 58m Icelandair the most punctual airline among airlines in Europe in July and September1 On time performance 83.1% more flights operated by the more efficient B737 MAX and A321 LR aircraft CO2 emissions per OTK - 4% driven by higher proportion of passengers on the to and from markets RASK increasing by 4% 1Cirium Analytics report ranking list
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3 3 Financial results Ívar S. Kristinsson, CFO
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4 4 To and from markets show strong year-over-year growth following a shift in focus due to weak transatlantic market Highlights the flexibility of the route network to respond quickly to changing market conditions Traffic data passenger network Change vs Q324 ASK: Available Seat KM, RPK: Revenue Seat KM, Load factor: RPK/ASK, OTP: On-Time-Performance, OTK: Operating Tonn KM, 1Cirium Analytics report ranking list 2% 2% 2% 17% 11% -11% 2% 3% -4% Capacity ASK Passenger Traffic RPK Load Factor Passengers all markets Passengers To Iceland Passengers From Iceland Passengers Via Iceland Passengers Within Iceland Yield On-time- performance CO2 Emissions per OTK 0.0 ppt 1.2 ppt Icelandair ranked it as the most punctual airline among larger airlines in Europe in April, June, July and September1 Icelandair´s on-time performance of 83.1%
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5 5 USD million Q3 2025 Q3 2024 Change Passenger revenue 522.1 496.5 5% Cargo revenue 18.2 16.9 7% Leasing revenue 22.1 23.2 -5% Other operating revenue 22.8 16.9 35% Operating income 585.3 553.5 6% Salaries and salary related 114.7 101.7 13% Aircraft fuel 118.6 125.0 -5% Other aviation expenses 107.2 95.0 13% Other operating expenses 124.1 105.7 17% Operating expenses 464.6 427.4 9% Depreciation and amortization -46.3 -42.6 -9% EBIT 74.4 83.5 - EBIT ratio 12.7% 15.1% -2.4 ppt EBT 72.1 83.1 - Net profit 57.3 69.2 - Revenue increased year-over-year in line with projections but cost headwinds weighed on the bottom line EBIT per segment USD million Commentary • Passenger revenue increased across all markets, except the via market, where passenger numbers declined by 11% • Several factors adversely affected costs: salary increases, an increase in unscheduled engine maintenance, ETS costs, and short- term aircraft lease • Net negative impact on EBIT of the depreciation of the USD estimated at USD 10 million • EBIT improvement in Cargo of USD 1.5 million year-on-year driven by strong imports • Leasing operation continues to deliver strong results with 21% EBIT margin Profit loss statement USD million Cargo Leasing Icelandair total 79.6 69.2 -1.1 0.4 5.0 4.7 83.5 74.4 Route network -10.3 1.5 -0.3 -9.1 Q324 Q325
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6 6 • Positive fuel cost development, supported by fleet renewal, operational efficiencies, and 10% drop in fuel prices. • New fleet and fuel efficiency initiatives, supporting long-term sustainability goals. • Carbon emission costs are increasing due to higher market prices. Includes a USD 3 million charge for settlement of costs from earlier period. • Use of Sustainable Aviation Fuel (SAF) and CORSIA also added to costs. Main changes in fuel cost Q325 vs Q324 in USD million Q324 Production impact Price Hedges Fleet changes & efficiency SAF & Corsia Q325 on fixed FX FX impact Q325 -6.2 -5.5 -4.5 4.8 117.8 118.6 ETS 125.0 2.3 1.9 0.8 -5% Fuel expenses decreased by 5% year-on-year Supported by fleet renewal, operational efficiencies and a 10% drop in effective fuel prices
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7 7 EBIT adversely impacted by inflation and unfavorable currency developments, partially offset by positive impact from transformation initiatives Main changes in EBIT Q325 vs Q324 in USD million EBIT Q324 Production impact Unit revenue change Contractual salary increases Inflation Unscheduled engine maintenance Depreciation of leased assets Fuel price & efficiency Transformation cost initiatives EBIT Q325 on fixed FX FX impact 12.4 -7.5 -8.1 -4.5 -8.9 -3.7 12.5 7.0 -10.1 74.4 Non-recurring cost 83.5 1.8 EBIT Q325 84.5 +1.0 -9.1
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9 9 Main changes in unit revenue Q325 vs. Q324 in US cents Load factor Yield Other revenue RASK Q325 on fixed FX FX impact RASK Q325 8.41 0.00 0.18 0.02 RASK1 Q324 0.10 8.70 8.61 +2% +4% 1RASK: Total revenue per available seat km (ASK) in the route network. Total revenue include ticket revenue, ticket revenue adjustments, ancillary revenue, and belly space revenue • Load factor remained strong at 85.9%, consistent with last year’s performance • Average yield up 3%, to 9.64 US cents • Transformation initiatives under the ONE program drove yield gains through network optimization, premium product enhancements, and disciplined pricing strategies • Mix shift toward TO/FROM Iceland increased exposure to higher-yielding markets • Premium cabin momentum continued: Saga revenue grew faster than Economy (+11% vs. +4%) Unit revenue in the route network increased by 4% year-on-year Driven by strategic network changes and strong demand in core markets - supporting profitability despite cost pressures
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10 10 Unit cost in the route network increased by 6% year-on-year Driven by currency movements, with additional impact from fuel savings and inflationary pressures Depreciation of the USD, especially the ISK the main driver of increased unit cost Excluding FX impact, the unit cost increase would have been +2%. Fuel cost reduction due to lower fuel prices and improved efficiency Fleet renewal, operational efficiencies, and a 10% drop in effective fuel prices. Other costs rose due to macroeconomic pressures The impact of a high inflationary environment, general cost increases, and macroeconomic pressures on operations and supplier pricing has outweighed the substantial efficiency and cost optimization gains achieved over the past year. Fuel Other CASK Q325 on fixed FX FX impact CASK Q325 7,14 -0,15 7,31 7,57 0,31 0,26 CASK1 Q324 2% 6% 1CASK: Total cost per available seat km (ASK) in the route network. Main changes in unit cost Q325 vs. Q324 in US cents
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11 11 Cargo and Leasing operations performed well Q324 Q325 18.2 19.5 +7% Q324 Q325 -1.1 0.4 +1.5 • Cargo operation with USD 0.4 million EBIT • EBIT improvement of USD 1.5 million year-on-year • Revenue growth 7%, driven by more imports • Freight carried increased by 10% • Leasing continues to deliver strong results with an EBIT margin of 21% • EBIT USD 4.7 million, slightly less than last year Q324 Q325 23.7 22.5 -5% Q324 Q325 5.0 4.7 -0.3 Q324 Q325 29,871 32,772 +10% Q324 Q325 5,771 7,127 +23% Revenue1 USD million EBIT USD million Sold BH2 Comments Revenue1 USD million EBIT USD million FTK3 Comments 1Revenue includes intra revenue 2BH: Block Hours 3FTK: Freight Tonn Kilometers
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12 12 Total liquidity1 Breakdown in USD million Strong total liquidity of USD 503 million at the end of September Liquidity2 development In USD million 170 150 236 133 105 175 92 92 92 30/09/2024 31/12/2024 30/9/2025 396 347 503 +411 +304 +255 +107 +156 26 16 29 Liquidity 30/6/2025 Cash to operations Net Capex 1 Other investing Net financing activities and exchange rate fluctuations Liquidity 30/9/2025 480 411 -69 Undrawn revolving facilities Marketable securities Cash and cash equivalents 1Total Liquidity = Cash, cash equivalents, marketable securities, and undrawn revolving facilities 2Liquidity = Cash and cash equivalents and marketable securities
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13 13 30 Sep 2025 31 Dec 2024 % chg. 30 Sep 2024 Shareholders' equity 339 269 26% 297 Loans and borrowings non-current 143 165 -13% 178 Leasae liabilities 481 399 21% 366 Other non c-current liabilities 146 100 47% 100 Total non-current liabilities 770 663 16% 644 Loans and borrowings current 38 41 -9% 42 Lease liabilities 77 66 17% 62 Derivatives used for hedging 0 6 -100% 13 Trade and other payables 323 241 34% 263 Defferred income 379 352 8% 339 Total current liabilities 817 706 16% 718 Total liabilities 1,587 1,369 16% 1,362 Total equity and liabilities 1,926 1,638 18% 1,659 Equity ratio 18% 16% 18% 30 Sep 2025 31 Dec 2024 % chg. 30 Sep 2024 Operating assets 542 560 -3% 557 Right-of-use assets 501 406 23% 368 Intangible assets and goodwill 58 56 2% 56 Other non-current assets 183 172 6% 171 Total non-current assets 1,283 1,194 7% 1,152 Inventories 29 24 17% 23 Derivatives used for hedging 13 4 185% 3 Trade and other receivables 190 160 19% 177 Marketable securities 175 105 68% 133 Cash and cash equivalents 236 150 57% 170 Total current assets 642 444 45% 507 Total assets 1,926 1,638 18% 1,659 Shareholders equity totaling USD 339 million and an equity ratio of 18% Equity and liabilities USD million Assets USD million
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14 14 Business update and outlook Bogi Nils Bogason, President and CEO
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15 15 Year-on-year change in capacity to and from Iceland and Icelandair capacity share (in available seats) at KEF airport 2024-2026 in % Rationalization of capacity to and from Iceland, strengthening Icelandair's leading hub position Our capacity share is forecasted at 67% in our hub in September 2026 compared to 50% at the beginning of 2024 Shift in timing of Easter and an earlier beginning of the 2nd bank 2024 2025 2026 Actuals Current Capacity Outlook 16% 19% 19% 3% 7% 3% 6% 5% 3% -1% -8% -6% -1% -3% -5% 17% 4% -4% -5% -4% -3% -11% -8% -12% -10% -12% -9% -12% -11% -11% -14% -13% J J A S O N D J F M A M J JJ S O N D J F M A M J J A 70% F M 50% A M A Icelandair capacity share Y-o-y chg in seat cap
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16 16 Current market situation: Weak VIA market overcapacity and low yields Strong ISK labor cost disadvantage Modest growth • Low to negative capacity growth • Cut unprofitable capacity • Focus on TO/FROM markets • Reduce emphasis on Via market • Identify profitable niches Modest growth of 2% Capacity growth in 2026 is focused on the shoulder and low seasons. to balance seasonality and improve utilization of infrastructure Focus on the To and From markets Reduced capacity in North America, while increasing in Southern Europe and Scandinavia New destinations Introduction of two new destinations in 2026: Venice in Italy and Faro in Portugal Flexibility realized Fleet reduced by two B757 aircraft, and the operation of our widebody Boeing 767 aircraft ceased at the end of 2026 The network focus in 2026 will be on the markets to and from Iceland, while ensuring strong connectivity across the route network Icelandair market position Our actions for 2026:
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17 17 Icelandair route network in 2026 Over 60 gateways N-America, Europe, Greenland, and Domestic Over 800 connection possibilities within the network and endless other through partnership airlines Three connecting banks More frequency, better products, and increased partner connectivity Two new destinations: V C E VENICE Flight time 4:40 Hours : Minutes First flight Jun '26 Month / Year F A O FARO Flight time 4:30 Hours : Minutes First flight Mar '26 Month / Year
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18 18 Fleet renewal in the international passenger network progressing well, with ~90% of flights in 2026 planned on new-generation aircraft, supported by improved utilization and a reduction of two aircraft 3 6 6 9 16 20 21 4 7 26 23 18 13 12 12 12 21 21 4 4 4 4 3 3 3 9 5 3 2 2018 2019 2020 2021 2022 2023 2024 2025 2026 33 33 28 26 31 35 36 37 35 28 new generation aircraft in the international route network in summer 2026 -2 B767 B757 B737 MAX A321LR Av. age of fleet 20 years Av. age of fleet 9 years
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19 19 We are transforming for the future by driving efficiencies, reducing costs and unlocking new revenue opportunities Examples of initiatives: Ongoing efforts to improve efficiency Focus on automation and expanding the shared service center in Tallinn. Fuel efficiency initiatives Top priority, driven by both cost-saving and sustainability goals. Critical negotiations with our key unions To reach long-term agreements that support competitiveness in a challenging global market, enable fleet and network expansion, and ensure operational flexibility aligned with industry standards. Strengthening of ancillary revenue Through pricing adjustments, enhanced upselling strategies, and product refinements to better meet customer expectations. >500 Ideas scheduled for implementation USD 100m Expected annual gain by the end of 2025 205 Initiatives successfully implemented by the end of Q3 2025 USD 50m Actual impact of initiatives year to date
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20 20 Financial guidance: EBIT for the full year 2025 expected to be negative USD 10-20 million Headwinds • Strong real exchange of the ISK • Global geopolitical environment • Cost pressure Tailwinds • Good outlook in Cargo and Leasing operations • ONE transformation progressing well • Improved revenue outlook in Q425 Assumptions • Average market price of jet fuel USD 700 per m/t in Q425 • USD/ISK exchange rate in Q425 at 123 • This guidance is subject to change due to various risks and uncertainties in the environment - +
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21 21 Key takeaways Revenue increased year-over-year despite fare pressure in the transatlantic market, but costs were adversely affected by several factors Net profit in Q325 of USD 58 million Leading hub carrier position strengthened Transforming the future Changes in the capacity to and from Iceland are strengthening the leading hub carrier position of Icelandair; capacity share in Q4 2025 69% Icelandair is transforming for the future with a clear focus on efficiency, cost reduction and unlocking revenue opportunities
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22 22 Thank you
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2323 Disclaimer • This material has been prepared by Icelandair Group hf. Unless stated otherwise all information is sourced by Icelandair Group hf. • The circulation of the information contained within this document may be restricted in some jurisdictions. It is the responsibility of the individual to comply with any such jurisdictional restrictions. • Forecasts, by their very nature, are subject to uncertainty and contingencies, many of which are outside the control of Icelandair Group. Past performance should not be viewed as a guide to future performance. Where amounts involve a foreign currency, they may be subject to fluctuations in value due to movements in exchange rates. • Icelandair Group cannot guarantee that the information contained herein is without fault or entirely accurate. The information in this material is based on sources that Icelandair Group believes to be reliable. Neither Icelandair Group nor any of its directors or employees can however warrant that all information is correct. Furthermore, information and opinions may change without notice. Icelandair Group is under no obligation to make amendments or changes to this presentation if errors are found or opinions or information change. Icelandair Group accepts no responsibility for the accuracy of its sources or information provided herein and therefore can neither Icelandair Group nor any of its directors or employees be held responsible in any way for the contents of this document. • This document must not be construed as investment advice or an offer to invest. • Icelandair Group is the owner of all works of authorship including, but not limited to, all design, test, sound recordings, images and trademarks in this material unless otherwise explicitly stated. The use of Icelandair Group´s material, works or trademarks is forbidden without written consent except where otherwise expressly stated. • Furthermore, it is prohibited to publish, copy, reproduce or distribute further the material made or gathered by Icelandair Group without the company‘s explicit written consent.