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1 We bring the spirit of Iceland to the world Q2 2026 Financial Results l 22 July 2026 Bogi Nils Bogason, President and CEO Ívar S. Kristinsson, CFO
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2 2 Icelandair delivered strong results in many areas in Q2 2026 Record revenue USD 496m up 7% year-on-year Our biggest Q2 top-line ever - with improving underlying margins excluding fuel On-time performance 82.8% arrivals on schedule in Q2 Leading hub carrier in Iceland 67% of available seats out of KEF in Q2 CO₂ emissions per OTK −5% lower year-on-year ONE transformation program USD 29m actual impact in Q2; 123m est. annual impact, fully implemented Strong load factor 84.0% of seats filled in Q2
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3 3 Record passenger revenue up by 7% from last year USD 421m RASK increasing by driven by a higher proportion of passengers on the to and from markets 9% CASK ex-fuel increasing by driven by salary increases, negative FX impact and increased disruption costs 7% Impact of cancellations caused by crew shortages 56 legs were cancelled, affecting 7,338 passengers USD 5m EBIT loss declining by USD 30m year-on-year USD 30m Fuel cost increasing by net of hedging gains, up 43% from last year USD 41m Negative FX impact on costs driven by the strengthening of ISK against USD USD 10m Equity ratio compared to 13.8% last year 10.5% Strong liquidity up USD 31m from Q225 USD 604m Record revenue generation in Q2 2026 and liquidity remains strong
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4 4 Financial results Ívar S. Kristinsson, CFO
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5 5 Strong yield and load factor improvement in Q2 2026 Yields up 5% and load factor at 84% Traffic data passenger network Q226 vs. Q225 ASK: Available Seat KM, RPK: Revenue Seat KM, Load factor: RPK/ASK, OTP: On-Time-Performance, OTK: Operating Tonn KM -1% 1% 5% 2% 3% 17% -4% 6% -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 1.9 ppt -4.4 ppt Icelandair’s on-time performance in Q2 2026 82.8%
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6 6 USD million Q2 2026 Q2 2025 Change Passenger revenue 421.3 393.0 7% Cargo revenue 20.5 19.1 7% Leasing revenue 29.0 30.3 -4% Other operating revenue 25.2 20.3 25% Operating income 496.2 462.7 7% Salaries and salary related 132.4 124.1 7% Aircraft fuel 136.5 95.5 43% Other aviation expenses 101.0 94.3 7% Other operating expenses 110.8 104.6 6% Operating expenses 480.8 418.5 15% Depreciation and amortization 45.0 43.4 4% EBIT -29.6 0.8 - EBIT ratio -6.0% 0.2% -6.2 ppt EBT -39.6 7.0 - Net loss -32.3 12.9 - EBIT per segment USD million Key drivers Q226 vs. Q225 • Passenger revenue increased by 7%, led by the market from Iceland, where passenger volume grew 17% • Depreciation of the USD drove a net positive EBIT impact of USD 4 million, increasing revenue by USD 14 million and costs by USD 10 million, after hedging effects • Cargo revenue grew 7%, demonstrating continued demand strength despite softer profitability • Despite softer revenue and profitability year-on-year, Leasing remained a solid contributor, generating a 12% EBIT margin in the quarter Profit loss statement USD million Cargo -32.6 -6.7 -0.6 1.6 3.6 5.9 -29.6 0.8 Icelandair totalLeasingRoute network -25.9 -2.3 -2.2 -30.4 Q226 Q225 Q2 profitability impacted by exceptional fuel cost inflation Operating income increased 7% year-on-year, while higher fuel prices drove EBIT to a loss of USD 29.6 million
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7 7 Fuel expenses in Q2 increased by 43% year-on-year Cost increase of 73m partially offset by fleet efficiency, slightly lower production and fuel hedge Main changes in fuel cost Q226 vs. Q222 in USD million • Higher fuel prices remained the main cost driver, increasing fuel expense by USD 73.5 million, more than offsetting operational efficiencies and hedge benefits • Ongoing fleet renewal and fuel-efficiency initiatives continue supporting long-term sustainability goals and help mitigate fuel-cost pressures • Carbon emission costs increased by 50% year-on-year, reaching USD 10.3 million in the quarter. The increase was driven by fewer free allowances, price change in carbon units and increased trips to Europe • Fuel hedges in place for ~47% of the consumption in 2026 @ price of USD 684/ton Q225 Production impact Price Hedges Fleet changes & efficiency Emission costs Q226 95.5 -1.1 -31.6 -3.7 136.5 73.5 3.8 +43% Key drivers Q226 vs. Q225 Hedge contracts and ratios Overview ton, hedge %, strike price $/mt 49% Q3 26 45% Q4 26 18% Q1 27 16% Q2 27 6% Q3-Q4 2027 53,900 34,000 12,000 14,000 10,000 $722 $760$661 $658 $669 Quarter totals Favorable Unfavorable
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8 8 EBIT bridge Q2: Main changes compared to last year EBIT Q226 vs. Q225, USD million Strong underlying performance offset by higher fuel costs Higher fuel costs were only partially recovered through fares in Q2 EBIT Q2-25 Revenue1 Operating costs2 Fuel cost3 Currency impact 4 EBIT Q2-26 -13.3 -41.0 +3.7 +0.8 +20.2 -29.6 -30.4 million 1On fixed FX 2On fixed FX, excluding fuel and emission costs 3Including emission costs 4Net impact on revenue and cost, after hedges Q2 2025 Q2 2026 6.16 7.78 6.59 8.44 +1.62 US cents +1.85 US cents CASK ex-fuel RASK Underlying unit economics improved in Q2 The RASK-CASK ex-fuel spread expanded by 14% YoY +14% spread expansion between years EBIT level Favorable Unfavorable
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9 9 Strong demand continues to support revenue quality Higher yields, stronger load factor and favorable traffic mix drove a 9% increase in RASK year-on-year Key drivers Q226 vs. Q225 Main changes in unit revenue Q226 vs.Q225 in US cents • Load factor reached a strong 84.0%, up 1.9 percentage points compared to last year • Average yield was up 5% year-on-year • Yield improvement driven by a higher proportion of passengers traveling to and from Iceland • Capacity was adjusted in response to market conditions and fuel price volatility, while maintaining focus on growth in the markets to and from Iceland Q325 Q425 Q126 Q226 L12M 3% 5% 7% 9% 6% Sustained improvement in unit revenues Year-on-year RASK development by quarter and on a rolling 12-month basis RASK1 Q225 Load factor Yield Other revenue RASK Q226 7.78 8.44 0.18 0.40 0.09 +9% RASK Favorable Unfavorable
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10 10 Key drivers Q226 vs. Q225 Main changes in unit cost excluding fuel Q226 vs. Q225 in US cents • Reported CASK up 15%, with fuel accounting for ~two-thirds of the increase • CASK ex-fuel up 7%, driven primarily by salary increases and negative currency impact • Underlying ex-fuel CASK increased by only 4.6% on a fixed FX basis • Higher share of European flying increased unit costs but strengthened profitability • Fleet renewal increased non-fuel costs while enhancing the product and improving fuel efficiency • Crew shortages and disruptions added temporary cost pressure • ONE transformation program delivering real savings, partly offsetting cost headwinds 1CASK = Total cost per available seat km (ASK) in the route network Network mix Fleet renewal Wage incerases Cancellations costs CASK1 ex-fuel Q226 on fixed FX Currency impact CASK1 ex-fuel Q226 0.14 0.05 -0.08 6.45 0.15 CASK1 ex-fuel Q225 6.16 Other changes 0.08 0.09 6.59 4.6% 7.0% Underlying unit cost performance remains resilient Cost pressures partially mitigated through transformation initiatives CASK Favorable Unfavorable
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11 11 Currency impact on EBIT and net earnings compared to last year USD million Q226 vs. Q225 Cost impact Revenue impact Currency hedges EBIT impact Negative FX finance income EBT impact Impact on Tax Total P/L impact 13.3 -3.5 3.7 -9.8-6.1 -6.1 -6.1 -12.2 • USD depreciation had a USD 3.7m positive EBIT impact, driven by higher revenues partly offset by cost and hedge headwinds • Negative FX income 9.8 million • Negative impact on tax liability is due to deferred tax assets being held in ISK • Net currency impact on the profit totaling USD 12.2 million Profit negatively affected by the depreciation of the USD USD 12.2 million currency headwind on net earnings in Q2 2026 versus Q2 2025 EBIT level Favorable Unfavorable Key drivers Q226 vs. Q225
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12 12 Total liquidity1 Breakdown in USD million Liquidity2 development In USD million 1Total Liquidity = Cash, cash equivalents, marketable securities, and undrawn revolving facilities 2Liquidity = Cash and cash equivalents and marketable securities 42 16 6 33 Liquidity 31/03/2026 Cash from operations Net Capex Other investing Net financing activities and exchange rate fluctuations Liquidity 30/06/2026 524 512 -13 317 367 398 163 157 114 92 92 92 30/06/2025 31/03/2026 30/06/2026 572 616 604 +480 +524 +512 +31 -13 Undrawn revolving facilities Marketable securities Cash and cash equivalents Quarter totals Favorable Unfavorable Strong total liquidity of USD 604 million at quarter-end Up USD 31 million compared with the end of the second quarter last year
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13 13 30 Jun 2026 31 Dec 2025 % chg. Shareholders' equity 230 286 -20% Loans and borrowings non-current 129 138 -7% Lease liabilities 520 462 13% Other non-current liabilities 152 147 3% Total non-current liabilities 801 747 7% Loans and borrowings current 26 39 -32% Lease liabilities 87 78 12% Derivatives used for hedging 0 4 -100% Trade and other payables 457 319 43% Defferred income 592 391 51% Total current liabilities 1,163 831 40% Total liabilities 1,964 1,577 24% Total equity and liabilities 2,193 1,864 18% Equity ratio 10.5% 15.4% 30 Jun 2026 31 Dec 2025 % chg. Operating assets 548 564 -3% Right-of-use assets 551 483 14% Intangible assets and goodwill 58 58 1% Other non-current assets 200 182 10% Total non-current assets 1,357 1,287 5% Inventories 31 28 10% Derivatives used for hedging 28 4 606% Trade and other receivables 266 179 49% Marketable securities 114 170 -33% Cash and cash equivalents 398 195 104% Total current assets 837 577 45% Total assets 2,193 1,864 18% Shareholders equity totaling USD 230 million and an equity ratio of 10.5% 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 Fuel prices remain elevated despite easing from recent peaks 0 200 400 600 800 1,000 1,200 1,400 1,600 Q1 23 Q2 23 Q3 23 Q4 23 Q1 24 Q2 24 Q3 24 Q4 24 Q1 25 Q2 25 Q3 25 Q4 25 Q1 26 Q2 26 Q3 26 Q4 26 Q1 27 Q2 27 1 Market price: Jet CIF NWE Fuel price development Actual Jan 2023-Jul 2026, spot forward price Aug 2026-Jun 2027 Actual market price1 USD per ton Spot forward price USD per ton Start of the Iran war ~$1,300 current, USD/t ~20% down from Q1 peak ~$900 forward, mid-2027 Market backdrop • Fuel prices have eased from their Middle East–escalation peak but remain well above pre-war levels • Forward markets point to further moderation, though uncertainty stays high Our response • We’ve raised fares across markets and are holding strict cost discipline to offset elevated fuel costs • We’ve accelerated the B757 phase-out and strategically reduced capacity
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16 16 Changing market dynamics reinforce the importance of flexibility and efficiency What's happening in the market 1 More cost-focused competition Finnair and SAS are adding flexible, wet-leased capacity to KEF, while Lufthansa's Discover and Air Canada Rouge position Iceland within their leisure portfolios 2 Capacity discipline across the Atlantic Aer Lingus is reducing three U.S. routes and making Seattle seasonal – underlining pressure in the non-premium part of the transatlantic market 3 Keflavik capacity returning to growth Overall KEF capacity is estimated to be down approximately 10% in Q3 but is expected to return to growth in Q4, increasing by approximately 8% year- on-year • Network, stopover and optimized product offering keeps us well positioned Key differentiators against the competition on the transatlantic market • ONE transformation program more relevant than ever The shifting competitive landscape reinforces the value of the efficiency and agility work already underway • Focus on cost competitiveness and flexibility We continue to adapt our cost base and increase flexibility to compete profitably across markets What this means for us
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17 17 Icelandair has invested USD 1 billion in fleet renewal since 2018 Fleet transformation has reduced average fleet age from 20 to 9 years while improving fuel efficiency and lowering emissions The fleet renewal continues, with four additional A320neo aircraft secured for delivery in 2027, supporting further growth and fleet modernization Together with the accelerated phase-out of the B757 and B767 fleet, these additions are expected to further reduce the average fleet age to 5 years in 2027 3 21 26 7 4 5 2 2018 20261 33 aircraft 35 aircraft Significant modernization of the international network fleet Fleet composition 2018-2026 B767 B757 A321LR B737 MAX Av. age of fleet 9 years Av. age of fleet 20 years 1 Delivery delay of one A321LR mitigated through wet lease of an A320ceo
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18 18 Fleet modernization New-generation aircraft share of block hours 2024 70% 2025 79% 2026 ~87% 2027 ~100% I N C R E A S E D U S E O F N E W- G E N E R AT I O N A I R C R A F T ~100% of block hours1 flown on new-generation aircraft in 2027 1In international route network
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19 19 Continued progression of the ONE transformation program Over 300 initiatives successfully implemented from 2024, estimated to deliver above USD 120m in annual impact Transformation status • Continued execution of strategic initiatives through the ONE transformation model • Current focus on structural cost improvements, including procurement optimization, productivity initiatives and fuel efficiency • Revenue initiatives continue to deliver results, supporting stronger pricing and commercial agility Digital & AI transformation • AI vision, governance framework, and phased roadmap, establishing the foundation for enterprise-wide adoption Looking ahead • Leverage digital and AI capabilities to support long-term productivity and customer experience improvements • ONE remains to be the foundation for continuous transformation and value creation ONE transformation program update Actual impact in Q2 USD 29m actual impact realized in Q2 from successfully implemented initiatives
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20 20 A second AOC in Malta strengthens utilization, flexibility and profitability Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2.0x 2024 2025 2026 Our production is concentrated in the summer Available seat kilometres (ASK), monthly 2024-2026 Why this creates value for us 1 Smooths our seasonality 2 Improves asset utilization and operational efficiency 3 Creates additional revenue and leasing opportunities 4 Simplifies & strengthens our core operation in Iceland 2.0× more capacity in July than in February in 2026 ~42% of annual ASK flown in June-September in 2026 5 Enables future growth
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21 21 Progress on our goals Since 2023 International destinations 2023 52 2026 65 Passengers 2023 4.3m 2025 5.1m First half of the year 2026 +27% compared to 2023 Block hours on new-generation fleet 2023 64% 2026 87% 100% new-generation by 2027 The momentum behind it Key drivers since 2023 67% KEF hub capacity share up from 53% +29% Revenue increase first half of the year 3× Partnership airlines grown from 5 to 14 $123m ONE transformation impact est. annual, fully implemented >30% Reduction in seasonality Jul/Feb capacity ratio decrease +6pp On-time performance first half of the year Building a stronger KEF hub for profitable long-term growth By our centenary in 2037, we aim to strengthen connectivity, expand the network and enhance hub economics 2 0 3 7 AM B I TI O N 75–90 destinations ● 8.5m passengers ● 75–100 aircraft
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22 22 A321XLR to strengthen connectivity and unlock the next phase of hub development Icelandair has secured 13 Airbus A321XLR aircraft, with the first delivery expected in 2029. The A321XLR will enable Icelandair to expand its network reach beyond the capabilities of the current fleet, unlocking new destinations and improving connectivity across the KEF hub. By increasing network connectivity, the aircraft will strengthen hub economics, support greater economies of scale, and further enhance Icelandair's long-term competitiveness and profitability.
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23 23 Negotiations of new collective bargaining agreements Negotiations with unions representing pilots, cabin crew, and aircraft maintenance technicians remain ongoing, aimed at reaching agreements that support Icelandair's long-term competitiveness, operational flexibility, and future growth while providing attractive aviation jobs in Iceland. Negotiations of new collective bargaining agreements Negotiations with unions representing pilots, cabin crew, and aircraft maintenance technicians remain ongoing, aimed at reaching agreements that support Icelandair's long-term competitiveness, operational flexibility, and future growth while providing attractive aviation jobs in Iceland
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24 24 Positive financial outlook for Q3 2026 For Q3 26, EBIT is expected to improve compared to last year1 Strong demand and record unit revenues are expected to more than offset the impact of higher fuel costs2 Q3 guidance for the route network: capacity -5% year-on-year; unit revenue +11-15%; unit costs, excluding fuel on fixed FX rates +5-8%, USD/ISK remains flat3
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25 25 Transforming for higher profitability Fleet renewal, the ONE journey and simplification are driving efficiency and improved margins, while Cargo and Leasing continue to support profitability Building a stronger KEF hub A larger network, stronger partnerships and future opportunities with the A321XLR are enhancing connectivity and long-term hub economics Positive outlook for Q3 Demand remains strong, we expect profitability to improve in Q3, and we remain focused on long-term value creation Record revenue, high load factor and improved unit revenues demonstrate the strength of the business despite the fuel cost pressure Strong underlying business performance Key takeaways
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26 26 Thank you
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2727 • 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. Disclaimer