Helgi Már BjörgvinssonSenior Vice President – Marketing & Sales

Samgönguþing Markaðsstofu NorðurlandsIcelandair, þróun og stefna

ICELANDAIR GROUP

CEOBirkir Hólm Guðnason

CEOBirkir Hólm Guðnason

Finance & AdministrationHlynur ElíssonFinance & AdministrationHlynur Elísson

HR & StrategySvali H. BjörgvinssonHR & StrategySvali H. Björgvinsson

CUSTOMERS: Retail & CorporateCUSTOMERS: Retail & Corporate

OPERATIONSJens Bjarnason

Flight Operations & TrainingHilmar Baldursson

In-Flight Safety & ServicesInflight Safety & Services

Fleet ManagementKristinn Halldórsson

Ground OperationsÁstþór Ingason

Technical ServicesJens Þórðarson

OPERATIONSJens Bjarnason

Flight Operations & TrainingHilmar Baldursson

In-Flight Safety & ServicesInflight Safety & Services

Fleet ManagementKristinn Halldórsson

Ground OperationsÁstþór Ingason

Technical ServicesJens Þórðarson

MARKETING & SALESHelgi Már Björgvinsson

Marketing & Business DevelopmentGuðmundur Óskarsson

Pricing & Revenue ManagementMatthías Sveinbjörnsson

Distribution & E-business DevelopmentÁrni Sigurðsson

Service CenterMaría Rún Hafliðadóttir

Customer LoyaltyIngibjörg Ásdís Ragnarsdóttir

Onboard RetailÞórdís Anna Oddsdóttir

Sales Regions

MARKETING & SALESHelgi Már Björgvinsson

Marketing & Business DevelopmentGuðmundur Óskarsson

Pricing & Revenue ManagementMatthías Sveinbjörnsson

Distribution & E-business DevelopmentÁrni Sigurðsson

Service CenterMaría Rún Hafliðadóttir

Customer LoyaltyIngibjörg Ásdís Ragnarsdóttir

Onboard RetailÞórdís Anna Oddsdóttir

Sales Regions

Corporate CommunicationGuðjón Arngrímsson

Corporate CommunicationGuðjón Arngrímsson

Marketing & Sales Helgi Már Björgvinsson - SVP

Marketing & Sales Helgi Már Björgvinsson - SVP

Pricing, RevenueManagement & PartnershipsMatthías Sveinbjörnsson – DIR

Pricing, RevenueManagement & PartnershipsMatthías Sveinbjörnsson – DIR

Distribution & E-businessDevelopmentÁrni Sigurðsson – DIR

Distribution & E-businessDevelopmentÁrni Sigurðsson – DIR

IcelandairCustomer LoyaltyIngibjörg Á. Ragnarsdóttir – DIR

IcelandairCustomer LoyaltyIngibjörg Á. Ragnarsdóttir – DIR

IcelandairService CenterMaría Rún Hafliðadóttir – DIR

IcelandairService CenterMaría Rún Hafliðadóttir – DIR

Marketing & BusinessDevelopmentGuðmundur Óskarsson – DIR

Marketing & BusinessDevelopmentGuðmundur Óskarsson – DIR

MARKETING &SALES

Onboard Retail &ServiceÞórdís Anna Oddsdóttir – DIR

Onboard Retail &ServiceÞórdís Anna Oddsdóttir – DIR

ICELANDÞorvarður

GuðlaugssonGM

ICELANDÞorvarður

GuðlaugssonGM

USA & CAN

Þorsteinn Egilsson

GM

USA & CAN

Þorsteinn Egilsson

GM

SCABjarni Birkir Harðarson

GM

SCABjarni Birkir Harðarson

GM

UKAndrés

JónssonGM

UKAndrés

JónssonGM

C-EUROPEEinar Páll Tómasson

GM

C-EUROPEEinar Páll Tómasson

GM

GSAÁrsæll

HarðarsonGM

GSAÁrsæll

HarðarsonGM

Icelandair officesIcelandair GSA

History

1937 to 2016

1945

For our customers, employees, environment

and shareholders.

WE CARE

Through consistency, reliability, clear product alternatives and friendly

service.

WE THINK CLIENTS

Via teamwork, shared information and values,

accountability and profitability.

WE DRIVE RESULTS

REFRESHING ICELANDICTRAVEL EXPERIENCE

12%

60%

0%

10%

20%

30%

40%

50%

60%

70%

2009 2015

Net Promoter Score

1. RELIABILITYMaking sure we keep our promise and that the service is accurate and dependable.

CUSTOMER EXPERIENCE STRATEGY

2. EXPECTATIONSFinding ways to impress the customer by adding unexpected treats to the services and exceeding expectations.

4. RECOVERYIf something goes wrong, the customer’s confidence needs to be regained.

5. FAIRNESSBe fair to our customer and use common sense to level the playing field.

6. MEASUREIn order to get results it is important to set achievable goals and measure those goals.

3. HUMBLEShowing the customer humility, telling the truth and not promising more than we can offer.

#MyStopover

16 26

GROWING ROUTE NETWORK

GROWING ROUTE NETWORK

GROWING ROUTE NETWORK

GROWING ROUTE NETWORK

CHANGE IN CAPACITY ON THE N-ATLANTICAVAILABLE SEAT KILOMETRES ICELANDAIR VS. TOTAL MARKET

ASK = available seat kilometers

-8%

-1%

6%

-2%

3%5% 6% 5%

-6%

22%

29%

14%

18% 19% 17%19%

2009 2010 2011 2012 2013 2014 2015 2016

Total

Icelandair

Ný mynd frá Íslensku

ROUTE NETWORK DEVELOPMENT

ROUTE NETWORK DEVELOPMENT1990 TO 2015

Finnair

Alaska Airlines

JetblueAirlines

WestjetAirlines

ScandinavianAirlines

AeroflotRussian Airlines

AIRLINE CODESHARES & PARTNERSHIPSOVER 90 AGREEMENTS WORLDWIDE

FLEET DEVELOPMENT

3

2

1

3

1

3

3

2019

6

5

2020

2

20212018

B737 MAX 8B737 MAX 9

IN 2018 B737 MAX WILL BE ADDED TO THE FLEET

THE SEAT COUNT WILL RANGE FROM 72 TO 262 SEATS IN THE FUTURE FLEET OF ICELANDAIR

72

138159 161

200

237

16

16 22

22

25

B737 MAX8*

154

+190

B767-300

262

B757-300

222

B757-200

183

B737 MAX9*

175

Q 400

72

Economy ClassSaga Class

* B737 MAX seat count is subject to change. Different seat lopas are being evaluated.

Current fleet types

Catchment area (population):ǀ Each gateway in SCA: 1.4 – 2.1 millionǀ KEF: 0.2 million

WEEKLY FLIGHTS FROM NORDIC COUNTRIES IN 2016TO THE US AND CANADA - ESTIMATE

0

20

40

60

80

100

120

140

160

180

KEF CPH ARN OSL BGO HEL

Icelandair SAS Norwegian Other Airlines

H - BHG

TOURISTS TO ICELAND: 1980-2016

0

200.000

400.000

600.000

800.000

1.000.000

1.200.000

1.400.000

1.600.000

TOURISM IS THE SOURCE OF GROWTH

Ι Limited economic recovery if we exclude tourism

-5%

1%

-1%

1%

-4%

3%

1%

3%

2010 2011 2012 2013

Economic growth excluding tourism

Economic growth with tourism

Akureyri

CHANGES IN CAPACITY 2016 VS FORECAST 2015AVAILABLE SEAT KILOMETRES

4%

Total capacity increaseNew destinations Increased capacity EUR Increased capacity NA

8%

6%

18%

OVERNIGHT STAYS IN HOTELS - NORÐURLAND

� Overnight stays in Hotels increased 14% between 2015 and 2014

� Overnight stays in hotels more than doubled now compared to 2005

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

0

5.000

10.000

15.000

20.000

25.000

30.000

35.000

40.000

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Ove

rnig

ht

sta

ys in

ho

tels

2013 2014 2015 % Usage 2014 % Usage 2015 9%

Source: Hagstofa Íslands

ICELANDAIR / KEF – AEY

2012 2013 2014 2015

Development Icelandair AEY – KEF

JÚN JÚL ÁGÚ SEP

PAX

CONNECTIONS IN KEF

� EUR – AEYAll 1st bank from EUR connecting 16:45 departure from KEF to AEY with 45 min. – 1 hour & 45 min. connecting time

� AEY – EUR Connection time on arrival from AEY to KEF 23:30 is between 1 hour – 1 hour & 45 min.

Connects to 2nd bank to Gothenburg, Copenhagen, Helsinki, Paris, Oslo and Stockholm.

� 2016 operation is once a week on Sundays from 19JUN – 28AUG• Dep. KEF 16:45 – arr. AEY 17:35

• Dep. AEY 22:45 – arr. KEF 23:30

AIR ICELAND PARTNERSHIP / REK – AEY

� Interline sales Icelandair on Air Iceland to AEY has doubled between 2014 (Jan-Dec) and 2015 (YTD)

Continental Europe

Copenhagen

North Scandinavia

Great Britain

North America

Icelandair interline sales on Air Iceland to AEY

2014 2015

AIR ICELAND AND Q400

� Next year Air Iceland will introduce Q400 into their network

� Below are flight times to MAN and LON (STN) – North-east of London

En Route Performance - AIR ICELANDQ400

En Route Temp: ISATotal Taxi Time for all Sectors: 15 min En Route Wind: 85% AnnualTotal Taxi Fuel for all Sectors: 105 kg Diversion Wind: Zero

No. From To Dist. WindCruise

FLCruise Speed Flight Block

nm kt kt hr:min hr:min

1 AEY STN 1.043 -18 270 333 03:29 03:442 STN AEY 1.043 -38 260 342 03:36 03:51

3 AEY MAN 902 -19 270 334 03:06 03:224 MAN AEY 902 -38 260 337 03:15 03:30

SECTOR TIME

ICELANDAIR Q400 OBSERVATION

� Dialogue between Icelandair and AEY (e.g. meeting at Routes Europe in Apr in ABZ

• Icelandair: Director Network Planning and General Manager UK & Ireland

• AEY: Arnheiður and Hjördís

� General idea to look into MAN. 2 month period with focus on school and skiing groups

� Sep/Oct 2016 was the original idea but now will be explored for 2017 (also ref. ABZ)

� Q400 aircraft will operate few times a day to AEY, which minimizes complexity (service level as per KEF-ABZ incl. lot of work and research)

� Jan-Mar 2017 would be the basis for analysis. Icelandair has a comprehensive sales and distribution channels in UK

AKUREYRI PROMOTIONS – IS

AKUREYRI PROMOTIONS – IS

AKUREYRI PROMOTION – SCA

AKUREYRI PROMOTION – SCA

AKUREYRI PROMOTION – C-EUR

AKUREYRI PROMOTION – UK

AKUREYRI PROMOTION – N-AMERICA

THANK YOU