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Message from the CEO

Iceland is an island nation that relies heavily on flight transportation and trading with other nations. We wish to welcome our guests while still being able to enjoy the excitement of being able to travel to exotic places, experience new cultures and exchange knowledge and goods with other nations. These lead to progress, and we thereby create economic growth for the national economy. We here at Isavia also understand that the growth must be sustainable and that we must work in harmony with our community.

It is a matter of some satisfaction that the international flight sector as a whole is working together to reduce carbon emissions. We are also aware that we must play our part and that co-operation is the key to success. We have set ourselves a course and action plans which we will work toward with every effort in co-operation with our business partners. We will e.g. work with neighbouring local authorities at Keflavík Airport toward a future vision of the area, taking into account the UN Global Goals. This is not least because Keflavík Airport is the largest workplace on the Reykjanes peninsula, and the growing scope of the airport has, therefore, a considerable impact on the municipalities around it.

2018 was another busy year for us. Passenger movements through Isavia airports totalled just under 10.6 million in 2018, an increase of just under 11% from 2017. The number of international passengers using Icelandic scheduled-flight airports increased from just under 8.8 million to just over 9.8 million, i.e. an increase of some 12% year-on-year. The number of domestic passengers fell over the same period, from just over 772,000 to just under 737,000, i.e. a decrease of some 5%.

The year’s operations went well, and despite a greater slowdown in passenger number increases than had been anticipated during the latter part of the year, the operating results were in accordance with the company’s original financial forecasts. The operating income of the Group amounted to almost ISK 42bn and increased by ISK 3.8bn between years, or by around 10%. EBITDA, i.e. results before depreciation, financial items and taxes, increased by almost ISK 1.5bn, or 15%. The total assets amounted to ISK 79.8bn at year-end 2018, an increase of ISK 7.3bn between years. The position of cash and cash equivalents continued to be strong by the end of the year, as did the company’s access to borrowed funds for continued development. Isavia’s tax footprint for 2018 was ISK 9,152m. This is the proportion that the Group pays or collects in the form of taxes and public levies, together with matching contributions to employee pension funds.

Increased scope of operations and growth calls for new solutions, with the added fact that great challenges await us internationally. With this in mind, Isavia’s policies were revised. Increased focus was brought to bear on corporate responsibility in accordance with the company’s policies that were set in this regard in 2016. We will continue to work on the adoption of the policies in co-operation with our employees, business partners and the local community.

We have been party to the UN Global Compact since 2016. By virtue of its participation, Isavia undertakes to ensure that its polices and work practices are in accordance with the ten basic rules of the United Nations on human rights, work issues, environmental issues and actions against corruption. We undertake, moreover, to participate in projects supporting the UN’s Sustainable Development Goals and to publish information on the company’s social responsibility.

We concentrate on issues in a number of fields, and the company sets itself high standards in this respect every year. Objectives and related improvement projects were selected with reference to the nature and policies of the company, comments from external stakeholders and the principles of the UN Global Compact, international goals and related government priorities. The objectives for 2019 are linked to six of the seventeen UN Global Goals.

We undertake, moreover, to participate in projects supporting the UN’s Sustainable Development Goals and to publish information on the company’s social responsibility.

Isavia issues an annual and social responsibility report according to the criteria of the Global Reporting Initiative for the third time this year. The report is modelled on the GRI Standards: Core this year together with GRI-G4 special provisions for airports. These special provisions deal specifically with the challenges and opportunities faced by airports when it comes to sustainability. Consideration is given to the company’s operations and to their impact on the economy, the environment and the community. The report is only issued electronically on the Internet this year. A large number of employees from all departments within the company were involved in its preparation, and we recruited an external consultant to review and ensure the reliability of the information. We welcome any and all comments on the content of the report, as continuous improvements are an integral part of our operations.

The key to success lies in the concentrated efforts of the employees of Isavia. I would like to express my thanks to all my colleagues for all their efforts and excellent collaboration. We are a united team! Together, we perform better.

This social responsibility report describes the operation of Isavia in 2018. The report is published as a progress report toward our goals as regards the UN Global Compact Convention (UNGC). Thereby we confirm our wish to work in accordance with the ten principles of the UN and work toward global goals. We declare our continued support of the UN Global Compact.

Björn Óli Hauksson, CEO