REGIONAL AND GREENLAND OPERATIONS ÁRNI GUNNARSSON ǀ MD AIR ICELAND

PATREKSFJÖRÐUR

BÍLDUDALUR

ÞINGEYRI

INGJALDSSANDUR

FLATEYRI

SUÐUREYRI

ÍSAFJÖRÐUR

REYKJANES

GJÖGUR

HÓLMAVÍK

STYKKISHÓLMUR

GRUNDARFJÖRÐUR

RIF

ÓLAFSFJÖRÐUR

SIGLUFJÖRÐUR

HÚSAVÍK

GRÍMSEY

KÓPASKER

RAUFARHÖFN

ÞÓRSHÖFN

BAKKAFJÖRÐUR

BORGARFJÖRÐUR

VOPNAFJÖRÐUR

NORÐFJÖRÐUR

FÁSKRÚÐSFJÖRÐUR

BREIÐDALSVÍK

HORNAFJÖRÐUR

VESTMANNAEYJAR

BLÖNDUÓS

SAUÐÁRKRÓKUR

AKUREYRI

REYKJAVÍK

VEY

HÖFN

EGILSSTAÐIR

KEFLAVÍK

30 SCHEDULED DESTINATIONS 1986

Reykjavík

Ísafjörður

Bíldudalur

Gjögur

Akureyri

Húsavík

Þórshöfn

Vopnafjörður

Egilsstaðir

Höfn

Vestmannaeyjar

Sauðárkrókur

Air Iceland

Eagle Air

Norlandair

Air Arctic

13 SCHEDULED DESTINATIONS IN 2013 Grímsey

MAJOR CHANGES IN RECENT YEARS ON THE DOMESTIC MARKET

With governmental definition in 2003 of minimum travel time to Reykjavík it was

clear which routes should be tendered and which not

Service agreements are currently with the

Government on domestic flights to 7 destinations

Service contract routes are today counting for around 5% of the total number of

passengers on domestic flights

Air Iceland´s flights are not operated

under service contracts

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

450,000

500,000

1971

1972

1973

1974

1975

1976

1977

1978

1979

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

DEVELOPMENT FOR THE LAST 40 YEARS 3% INCREASE PER YEAR ON AVERAGE

Number of passengers on domestic flights 1971-212

ǀ Number of passengers in January-July 2013, 9% less than for the same period in 2012

ǀ Strong focus on capacity adjustment due to negative development in demand has resulted in

higher load factor compared to last year (68% to 71%).

DEVELOPMENT DOMESTIC FLIGHTS JANUARY-JULY 2012 AND 2013

Number of passengers domestic flights January – July 2012-2013 in thousands

Load factor domestic flights January – July 2012 -2013

0

5

10

15

20

25

30

35

40

Jan Feb Mar Apr May Jun Jul

2012 2013

56%

58%

60%

62%

64%

66%

68%

70%

72%

74%

76%

Jan Feb Mar Apr May Jun Jul

2012 2013

European Regional Association (ERA) reports a 9% decrease in passenger

numbers with an increase in load factor of 2 ppt. (64.2% to 66.5%) in the first

3 months of 2013 vs. 2012.

DEVELOPMENT IN EUROPE KEY INDICATORS

-9.0%

-10.0%

-12.7%

-13.0%

-12.5%

-9.8%

Passenger growth

Passenger km growth

Seat growth

Seat km growth

Hours growth

Landings growth

Key indicators in Europe % change Q1 2013 vs. Q1 2012

DEVELOPMENT OF TAXES AND FEES DOMESTIC FLIGHTS

Increase of taxes and fees per year 2003-2012

364%

271%

75%

82%

0%

50%

100%

150%

200%

250%

300%

350%

400%

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Fees and taxes

Fees and taxes per passenger

Price index

Airfare RKV-AEY

As of 1 April 2013 passenger

fees increased by 40% and

landing fees by one third at

Reykjavik Airport

Passengers are not just municipal staff traveling on taxpayer´s expense. For example 30,000 children

(2-11 years) and 6,000 infants (0-2 years) travelled with Air Iceland last year, representing about 10%

of total passenger number

REASON FOR TRAVELLING* DOMESTIC FLIGHTS

24.2% 17.2% 19.2% 18.9% 20.0% 18.8%

22.3% 23.1% 18.9%

14.0%

27.2%

20.0% 38.8%

28.4%

41.8%

29.2%

41.9%

20.3% 21.4% 28.4%

22.0%

26.5%

27.8%

13.2% 30.6% 10.0%

21.4%

14.8%

32.3% 32.0%

15.6% 36.2%

16.4%

28.0% 30.8%

21.8% 29.3% 29.4%

24.5% 25.1% 23.5%

37.2%

27.9% 29.8%

Jun´04 Nov´04 Jul´05 Feb´06 Aug´06 Dec ´07 Jul´08 Jul´09 Mar´10 Aug´11 May-Jun´12

Visit to friends/family

Business

Vacation

Other

* Survey on board Air Iceland 2012

ǀ Most passengers are traveling on

their own or about 47% of the

passengers

ǀ 11% of flights are paid for by

relatives

ǀ 20% are paid for by private

companies

ǀ 12% by the state and

municipalities

ǀ 5% by sports clubs

WHO PAID FOR THE FLIGHT*

1,4%

0,4%

1,3%

1,4%

5,1%

11,1%

11,8%

20,7%

46,9%

Other

Friend

Spouse

Municipality

Sports Club

Family

PublicCompany/Institution

Private Company

Myself

* Survey on board Air Iceland 2012

ǀ Despite a decrease of the total number of

passengers on domestic flights the year to

date number of foreigners travelling on

domestic flights has increased by 22%

ǀ The continues increase in the number of

foreign arrivals to Iceland gives a great

opportunity to increase the 10% share the

tourist represent today of the total number of

passengers on domestic flights

TOURISTS ON DOMESTIC FLIGHTS GREAT GROWTH OPPORTUNITY

35%

13%

-2%

34%

9%

22%

Asia

N-A

meri

ca

Sca

ndin

avia

West E

uro

pe

East E

uro

pe

Tota

l

Increase in the number of tourist on domestic flights January – July 2013 vs. 2012

TERMINAL IN REYKJAVIK

TERMINAL IN REYKJAVIK

TERMINAL IN REYKJAVIK

GREENLAND OPERATION

ACTIVITIES IN GREENLAND 5 DESTINATIONS THEREOF 2 DESTINATIONS SERVED ALL YEAR

Reykjavik Kulusuk

1-2 times a week all year although no contract with

the Greenland Government

Reykjavik Kulusuk

Moreover 1-2 trips daily from late May to mid-September

Reykjavik Nuuk

All year

Reykjavik Ilulissat

February to April and again from

June to September

Reykjavik Narsarsuaq

June to September

Akureyri Nerlerit Inaat

GSA cooperation with Norlandair

THE MARKET

Business Customers and other “must-go” travelers

| Growing due to greater cooperation between countries

| Connecting passengers

| The majority of the passengers in low season

Tourists

| Traditionally from Europe in high season

| Growing opportunities in low season

| from markets in U.S. and Far East (Japan, Taiwan)

Greenland is a country rich of Minerals and Oil. Initial steps have been taken to start exploiting the opportunities which these resources give. Many projects have been worked on over the last decade or more and some of them are getting closer to be operational. Below is an overview over the status of activities:

Mineral

| No of prospecting licenses 19

| No of exploration licenses 63

| No of exploitation licenses 4

| No. km² under exploration licenses 37.730 (2011)

| Exploration expenses (mill. DKK) 711 (2011)

| Exploration drilling (meters) 52.304 (2011)

Oil

| No of Hydrocarbon licenses 16

FUTURE MARKET IN GREENLAND

17.4

19.3

22.1

24.3

29.0 30.4

2007 2008 2009 2010 2011 2012

*Air Iceland

PASSENGER TO/FROM GREENLAND* 15% INCREASE ON AVERAGE PER YEAR

Number of passengers to/from Greenland 2007-2012 in thousands

ICELAND AS A HUB FOR GREENLAND