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1 We bring the spirit of Iceland to the world Q4 and 12M 2025 Financial Results l 6 February 2026 Bogi Nils Bogason, President and CEO Ívar S. Kristinsson, CFO
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2 2 We achieved significant results in 2025 thanks to our committed Icelandair team Record load factor 83.5% CO2 emissions per OTK -5% Icelandair among the most punctual airlines in Europe 83.9% on-time-performance Record Saga Premium revenue Improved efficiency 2% fulltime equivalents 8% capacity increase >560 Ideas scheduled for implementation 233 Initiatives successfully implemented +USD 100m Annual impact when fully implemented Strengthened our position as leading hub carrier in Iceland Record revenue USD 1.7bn up 11% year-on-year Strong Customer satisfaction Transforming for the future 5.1 million passengers carried for the first time up 8% vs 2024
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3 3 Significant challenges in the external environment negatively impacted 2025 results Weakening of the USD Depreciation of the USD pressuring margins through higher non-USD costs and changes in demand Currency effect of USD 44 million on expenses To & Via markets Weaker demand from the US, our strongest market, to Iceland, driven by the depreciation of the USD This is compounded by softer demand from Europe to the US, resulting in 6% lower yields in the via market Wage increases Wage increases in Iceland have risen at an unsustainable pace in recent years This growth far exceeds that of neighboring countries, and is challenging for export-driven companies with most of their revenues in foreign currencies Emission charges Environmental charges have become increasingly burdensome, evidenced by them doubling year-on- year, reaching USD 43 million
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4 4 Key financial highlights in 2025 Record passenger revenue up by 17% from last year USD 1.5bn RASK increasing by driven by a higher proportion of passengers on the to and from markets 2% CASK increasing by with negative currency development the largest contributor 2% Good EBIT results in Cargo and Leasing up by USD 7.4m from last year USD 25m EBIT loss record revenue but costs were adversely affected by several factors USD 17m Net loss improving by USD 10.6m from last year USD 9.5m Net cash from operations improving by USD 84m from last year USD 305m Equity ratio compared to 16% at YE24 15% Strong liquidity up USD 111m from YE24 USD 458m Total assets up USD 227m from YE24; higher liquidity position and more AC assets USD 1.865m
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5 5 Financial results Ívar S. Kristinsson, CFO
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6 6 Q4 2025: Record load factor on 12% year-on-year capacity increase Number of passengers up by 13%, led by the market from Iceland where passenger numbers grew 23% Traffic data passenger network Q425 vs. Q424 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 12% 13% 4% 13% 12% 23% 11% 2% -3% Capacity ASK Passenger Traffic RPK Load Factor Passengers all markets Passengers To Iceland Passengers From Iceland Passengers Via Iceland Passengers Within Iceland On-time- performance CO2 Emissions per OTK 0.8 ppt 6.5 ppt Yield among the most punctual airlines in Europe1 Icelandair’s on-time performance in Q4 2025 83.3%
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7 7 USD million Q4 2025 Q4 2024 Change Passenger revenue 323.9 276.6 17% Cargo revenue 21.4 22.2 -4% Leasing revenue 30.3 30.6 -1% Other operating revenue 30.9 19.4 59% Operating income 406.5 348.8 17% Salaries and salary related 124.3 102.9 21% Aircraft fuel 84.2 74.6 13% Other aviation expenses 79.3 68.7 15% Other operating expenses 104.2 94.1 11% Operating expenses 392.0 340.2 15% Depreciation and amortization 44.6 40.6 10% EBIT -30.1 -32.1 - EBIT ratio -7.4% -9.2% 1.7 ppt EBT -40.2 -35.7 - Net loss -35.6 -30.6 - EBIT per segment USD million Key drivers • Passenger revenue increased across all markets, led by the market from Iceland, where passenger volume grew 23%. • Depreciation of the USD drove a net USD 17 million increase in operating expenses, after hedging effects. • Several factors adversely affected costs: salary increases, an increase in unscheduled engine maintenance, and emission costs. • EBIT for Cargo decreased by USD 1.5 million year-on-year, driven by reduced fish exports to the U.S. and lower salmon volume. • Leasing operations delivered a solid 15% EBIT margin, remaining strong despite a 2.4 ppt year-on-year decline. Profit loss statement USD million Cargo Leasing Icelandair total -39.9 -35.7 2.6 1.1 5.2 4.5 -32.1 -30.1 Route network +4.2 -1.5 -0.7 +2.0 Q424 Q425 Operational strength drives EBIT improvement in a challenging cost environment Strong revenue growth of 17% mitigates unfavorable currency movements and operational cost pressures
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8 8 Overview of main changes in salary and salary-related costs Q425 vs. Q424 in USD million Average number of FTEs Change year-on-year Production Contractual salary increases Labor efficiency Other1 Q425 on fixed FX Net FX impact Q425 102.9 -7.4 115.9 124.3 10.0 8.8 1.6 8.4 Q424 +13% +21% +10% Q425 Efficiency2 2024 2025 Efficiency2 3,254 3,352 Q424 3,575 3,520 +9% +98 (+3%) -55 (-2%) 1 One-off severance expenses related to the layoffs performed in November 2 Efficiency measured in ASK per FTE Higher salary costs driven by FX movements and contractual wage increases FTEs up by 3% on 12% production increase, representing an efficiency increase of 9% during the quarter
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9 9 Fuel expenses in Q4 increased by 13% year-on-year Fleet efficiency and fuel hedge gains are offset by rising emission costs Main changes in fuel cost Q425 vs. Q424 in USD million • Ongoing fleet renewal and fuel-efficiency initiatives continue supporting long-term sustainability goals and help mitigate fuel-cost pressures. • Emission costs increased by 165% year-on-year, driven by a rise in carbon credit prices, fewer free allowances and increased liability for prior periods • Mandatory use of Sustainable Aviation Fuel (SAF) and CORSIA further increased cost. • Fuel hedges in place for ~40% of the consumption in 2026 @ price of USD 670/ton Q424 Production impact Price Hedges Fleet changes & efficiency Emission costs Q425 74.6 8.9 2.9 -5.3 -5.1 8.3 84.2 +13% Key drivers Q425 vs. Q424 Hedge contracts and ratios Overview ton, hedge %, strike price $/mt 31% Q1 26 39% Q2 26 47% Q3 26 32% Q4 26 11% Q1-Q3 2027 20,700 39,500 53,900 25,000 30,000 $678 $661 $659$661$698
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10 10 EBIT 2025 on fixed FX Net FX impact EBIT 2025EBIT 2024 128.0 Pax 42.2 Other Revenue Production impact on costs Cost inflation Unscheduled engine maintenance Emission costs Net fuel price Contractual salary increases Transformation & other 170.3 -111.2 -25.2 -24.9 -8.4-14.2 30.8 31.0 26.5 -43.7 -17.2 -21.7 +40.7 -3.0 Q125 Q225 Q325 Q425 2025 6.6 -2.5 -9.1 2.0 -3.0 USD weakness pressured EBIT in Q2-Q3; Q4 rebounded with mitigation EBIT development 2025 vs. 2024 Main changes in EBIT 2025 vs. 2024 EBIT bridge 2025: Significant underlying improvement year-on-year Strong 11% revenue growth and continued cost optimization more than offset by sharp weakening of the USD
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11 11 Currency movements: Impact on 2025 EBIT and net earnings 2025 vs. 2024 in USD million Currency EBIT impact Currency hedges EBIT impact Positive FX finance income EBT impact Impact on Tax Total P/L impact 15.3 8.4 8.8 -58.9 -43.7 -35.2 -26.4 • Negative year-on-year currency impact on EBIT¹ estimated at USD 43.7 million • Positive currency hedge result of USD 18.4 million, an improvement of USD 15.3 million year-on-year • Positive finance income of USD 8.4 million driven by currency effects • Positive impact on tax liability due to deferred tax assets held in ISK • Net negative currency impact on the P&L totaling USD 26.4 million 1 Currency impact is estimated on costs; the revenue effect is harder to isolate as exchange rates influence both prices and underlying demand patterns. USD depreciation drove negative impact on 2025 EBIT and profit Currency depreciation outweighs hedge gains and tax benefits
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12 12 Key drivers 2025 vs. 2024 Main changes in unit revenue 2025 vs.2024 in US cents • Load factor reached a record 83.5%, up 0.9 percentage points year-on-year. • Average yield was 9.0 US cents, up 1% compared to last year. • Yield improvement despite fare pressure in the transatlantic market driven by targeted network optimization and a higher proportion of passengers traveling to and from Iceland. • Transformation initiatives continued to enhance yields through network and pricing optimization, upgraded premium product offerings and strengthened ancillary revenue streams.Q125 Q225 Q325 Q425 2025 0.9% -1.9% 3.4% 5.0% 1.8% 1RASK = Revenue per available seat kilometer in route network Three out of four quarters with positive year-on-year development, driven by increased focus on higher yielding markets to and from Iceland RASK1 2024 Load factor Yield Other RASK 2025 7.92 8.06 0.08 0.06 0.01 +2% Unit revenue development 2025 vs. 2024 Unit revenue in the route network increased by 2% year-on-year Higher load factor and yield gains despite fare pressure in the transatlantic market
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13 13 Key drivers 2025 vs. 2024 Main changes in unit cost 2025 vs. 2024 in US cents • Higher unit costs year-on-year are primarily driven by unfavorable FX developments, with the USD weakening by roughly 10% against the ISK. • Cost-reduction measures from the ONE transformation program have helped offset inflationary pressures across parts of the value chain. • Fuel unit costs down 7% year-on-year, supported by lower fuel prices, hedging gains and increased fuel efficiency, which together mitigate doubling of emission charges between years. 1CASK = Total cost per available seat km (ASK) in the route network Fuel Other CASK 2025 on fixed FX FX impact CASK 2025 8.18 -0.15 8.10 8.33 0.06 0.24 CASK1 2024 -1% +2% Unit cost development 2025 vs. 2024 Unit cost in the route network increased by 2% year-on-year Driven by currency movements, with additional impact from fuel savings and inflationary pressures Q125 Q225 Q325 Q425 2025 -2.6% -0.6% 6.0% 2.3% 1.9% USD weakness in Q2 drove CASK up, but mitigation actions delivered clear improvement by Q4
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14 14 2024 2025 82.4 84.2 +2% 2024 2025 0.8 4.4 +3.6 • Cargo operation with USD 4.4 million EBIT, improving by 3.6 million year-on-year • Revenue increase of 2%, mainly driven by higher import volumes along with strong growth in Salmon exports • Freight carried decreased by 2% • Leasing continues to deliver strong results, with an EBIT margin of 18% • EBIT USD 20.4 million, improvement of USD 3.8 million year-year • Sold block hours increased by 30% 2024 2025 95.6 112.0 +17% 2024 2025 16.6 20.4 +3.8 2024 2025 141 138 -2% 2024 2025 21,236 27,515 +30% Revenue1 USD million EBIT USD million Sold BH2 Comments Revenue1 USD million EBIT USD million FTK’0003 Comments 1Revenue includes intra revenue 2BH: Block Hours 3FTK: Freight Tonn Kilometers Cargo and Leasing operations delivered strong results in 2025 Strong revenue growth in Leasing and solid EBIT improvement across both Leasing and Cargo
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15 15 Total liquidity1 Breakdown in USD million Liquidity2 development In USD million 150 195 105 170 92 92 31/12/2024 31/12/2025 347 458 +366 +255 +111 305 24 Liquidity 31/12/2024 Cash from operations Net Capex Net financing activities Effect of FX on cash held Liquidity 31/12/2025 255 -112 -106 366 +111 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 Strong liquidity of USD 458 million at year-end Improved liquidity driven by working capital movements and weaker USD Ættum við ekki að brjóta frekar niður hvað er að drive‘a aukninguna í cash? Breyting færsluhirðingar (+40m USD) ETS keypt fwd en ekki spot (+30m) Gengishagnaður ISK eigna (+30m) Er Net financing uppgreiðsla lána umfram nýja lántöku? Hvernig eru gengissveiflur að taka cash niður? Var það ekki einmitt að vinna með okkur á ISK eignahliðinni?
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16 16 31 Dec 2025 31 Dec 20241 % chg. Shareholders' equity 286 269 6% Loans and borrowings non-current 138 165 -16% Lease liabilities 462 399 16% Other non-current liabilities 147 100 47% Total non-current liabilities 747 663 13% Loans and borrowings current 39 41 -5% Lease liabilities 78 66 18% Derivatives used for hedging 4 6 -36% Trade and other payables 319 260 23% Defferred income 391 352 11% Total current liabilities 831 725 15% Total liabilities 1,577 1,388 14% Total equity and liabilities 1,864 1,657 12% Equity ratio 15% 16% 31 Dec 2025 31 Dec 20241 % chg. Operating assets 564 560 1% Right-of-use assets 483 406 19% Intangible assets and goodwill 58 56 3% Other non-current assets 182 172 6% Total non-current assets 1,287 1,194 8% Inventories 28 24 15% Derivatives used for hedging 4 4 -10% Trade and other receivables 179 179 0% Marketable securities 170 105 63% Cash and cash equivalents 195 150 30% Total current assets 577 462 25% Total assets 1,864 1,657 12% Shareholders equity totaling USD 286 million and an equity ratio of 15% Equity and liabilities USD million Assets USD million 1Comparative information has been reclassified
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17 17 Business update and outlook Bogi Nils Bogason, President and CEO
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18 18 Wage increases in Iceland have significantly outpaced key competing markets 0% 10% 30% -5 0 5 10 15 20 25 30 35 40 45 50 2020 2021 2022 2023 2024 2025 17% 37% Iceland UK USA Euro area Other Nordic countries Nominal wages Aggregated increase from 2020 Source: The Central bank of Iceland 27% 17% 49% • Icelandair has focused on increased organizational efficiency to mitigate these significant cost increases • Productivity improved 10% in 2025 • Negotiations with pilots, cabin crew, and mechanics are currently ongoing with the focus on ensuring Icelandair´s competitiveness, while continuing to secure attractive aviation jobs in Iceland
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19 19 Revenue initiatives include inter alia: • Comprehensive revenue optimization designed to drive growth through more agile and responsive pricing and revenue-management processes. • Refined product and service offerings by unbundling selected services Cost initiatives include inter alia: • Increased automation • Organizational restructuring • Improved productivity • Coordinated fuel-saving program • Unbundling of product offering 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. >560 Ideas scheduled for implementation 233 Initiatives successfully implemented from 2024 +USD 100m Annual impact when fully implemented Net recurring benefit year-end 2025 +100m The ONE transformation program is progressing well with estimated annual impact when fully implemented over USD 100 million
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20 20 Positively contributing to work and economic growth Icelandair continues to drive positive impact on the economy and wider society Gender equality improvement pilots, cabin crew, management Icelandair on track towards 2030 target of CO2/OTK2 2019 baseline 2024 2025 0.90 0.73 0.70 -22% -5% 14% 13% 16% 17% 40% 41% 2024 2025 2024 2025 2024 2025 Female Pilots Male Cabin Crew Female Exco & Directors 2024 2025 3,575 3,520 -2% 274 322 2024 2025 +17% Av. no. of FTEs Tax footprint1 in Iceland 1Tax footprint: USD million , 2OTK: Operational Ton Kilometer
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21 21 Icelandair capacity share (in available seats) at KEF airport 2024-2026 in % Icelandair’s leading hub position in KEF airport is strong Our capacity share is forecasted at 68% in our hub in January 2026 compared to 50% at the beginning of 2024 Actuals Current Capacity Outlook J J A S O N D J F M A M J J AJ O N D J F M A M J J A S 70% F M 50% A M S 2024 2025 2026
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22 22 Our network in 2026 Capacity +2% from 2025 Capacity change from 2025 +2% 3 Connecting banks +800 connection possibilities Continued focus on the markets to and from Iceland Capacity increase driven by European destinations Increased emphasis on Southern Europe and Scandinavia Available seats 6.3m Three new destinations: +60 destinations Faro FAO Venice VCE Gdansk GDN
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23 23 Improved utilization in the passenger network • The fleet will comprise 52 aircraft in 2026, thereof 35 serving the international route network and six serving the domestic operation • International fleet will be reduced by two aircraft in summer 2026 as older generation aircraft, B757 and B767, will be retired • 757 and 767 will be out of the fleet in the beginning of 2028 Majority of flights operated on new technology aircraft • In 2026, ~90% of flights in the international network will be operated on the efficient B737 MAX and A321LR aircraft • These aircraft offer improved passenger comfort, with quieter flights and modern interiors • They also deliver up to ~30% better fuel efficiency compared to older generation aircraft Six A321LR in operation summer 2026 • The A321LR is the successor of our Boeing 757 • The A321LR can operate to all destinations in the network previously served by the B757 • Icelandair has a purchase agreement for 13 A321XLR aircraft • The first XLRs are scheduled for delivery in 2029 Improved utilization in the passenger network • The fleet serving the passenger route network will be reduced by two aircraft in summer 2026 • ~ 90% of flights in the network will be operated on the latest generation aircraft in 2026 • The new The fleet renewal in advanced stages • The fleet will comprise 52 aircraft in 2026, thereof 34 serving the international route network and six serving the domestic operation • Four older generation aircraft, the B757 and B767 retired before summer 2026 • Fleet renewal completed in 2027
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24 24 Icelandair financial outlook 2026 Unit revenue development is expected to outpace that of unit cost, supported by a strong hub position, positive booking status, and rebalanced summer 2026 network, with focus on European destinations 3 Profitability expected to improve year-on-year driven by the passenger route network1 Unit cost excluding fuel is expected to increase less than in 2025, driven by the ONE transformation program and better utilization of our resources year- round 2 Profitability for the Leasing and Cargo segments is projected to remain strong4
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25 25 2026 is off to a good start with yields up by 7% and the number of passengers in January up by 14% Traffic data passenger network January 2025 vs. January 2024 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 14% 15% 7% 14% 16% 27% 8% 4% -5% Capacity ASK Passenger Traffic RPK Load Factor Yield Passengers all markets Passengers To Iceland Passengers From Iceland Passengers Via Iceland Passengers Within Iceland On-time- performance CO2 Emissions per OTK 0.5 ppt 6.5 ppt
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26 26 Key takeaways Geopolitical development affecting margins Weakening of the USD has put pressure on margins through changes in demand and non- USD costs Transforming the future 233 actions implemented since 2024, with over 100 million in annual impact expected when fully implemented Strong leading hub carrier position Icelandair’s leading hub carrier position at KEF airport is strong; continued focus in 2026 on the higher yielding To and From markets Record revenue and load factor, improved efficiency and outstanding OTP, placing us among the most punctual airlines in Europe Significant results achieved in 2025
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27 27 Thank you
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2828 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.