Icelandair has just announced that it is ending its government credit facility requirement. The carrier has put behind the financial bad times and started 2022 in good shape and states it has survived the pandemic and its economic implications.
Government Credit Facility
The airline was given a $120 million credit facility by the Icelandic government and state-run banks; Íslandsbanki and Landsbankinn, in September 2020. They performed so efficiently that they ended the two-year agreement seven months before it was due to end.
Bogi Nils Bogason, Chief executive and President of Icelandair stated,
“It is gratifying to announce our termination of the government-backed facility almost eight months ahead of schedule and without ever having had to draw on it. The facility was a key component in the successful financial restructuring which was made possible through the coordinated efforts of all major stakeholders.”
He continues, “As the aviation industry moves closer to normal operations, I am confident we have what it takes to reach our primary objective coming out of the pandemic – to return to sustainable operating results.”
Covid Period Statistics
Icelandair Group stated on 7 February,
“The credit facility was vital to complete the financial restructuring, enabling the company to maintain valuable know-how and preserve the infrastructure necessary for an efficient ramp-up of its operations post-Covid.”
The traffic data released by Icelandair Group shows that the carrier had 113,000 passengers during the month of January. With the associated load factor of 60% in January 2022, compared to just 39% in January 2021.
A glance at the company’s financial performance pre and through the pandemic shows that they had a decent net profit of over $89 million in 2016-17 and nearly $38 million in 2017-18. They dipped into negative net profits of over $55 million, $57 million, and most recently $376 million between 2018-20.
Due to the less severe effects of the Omicron variant experienced by passengers, the company has noticed a growth in the number of bookings for the months ahead.
Which airline do you think will be next to end its government credit facility? Let us know in the comments below!