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Chairman´s statement

Recent years have seen unusually sharp rises and falls in the growth of international flights in Iceland. Passenger numbers at Keflavík International Airport rose sharply between 2009 and 2018, more than quadrupling over the period. The company was barely able to keep up with upgrading infrastructure and service capability in line with this growth. Then things turned completely on their head. Passenger numbers fell by 26% in 2019, due to the collapse of WOW air and the grounding of Icelandair’s Boeing 737 MAX aircraft. Following a tough year, by early 2020 the tourism sector – including Isavia – imagined that the worst was now over and was gearing up for growth to return.

Nothing could have been further from the truth. As we all know, the pandemic hit in early 2020, causing an 81% drop year-on-year in the number of international passengers using Keflavík Airport. We need to go right back to the turn of the century – long before tourism began to boom in Iceland – to find similar passenger numbers at Keflavík Airport.

All of this put Isavia’s strength seriously to the test. It is good to see how well the company – despite everything – has handled the misfortunes visited on it by the pandemic. The organisation changes made in the group in 2019 make it easier for various operational units in the Isavia group to pursue their priorities in wholly unforeseen circumstances.

The company has been successful in protecting and maintaining its infrastructure during the pandemic – this infrastructure is an integral part of Iceland’s key infrastructure, in both economic and security terms. The company continues to have good access to liquidity, a very important factor in the current period of uncertainty. International opinion polls have placed Iceland in a strong competitive position as a safe, high-quality tourist destination – with much-sought-after natural wilderness – when world travel to some extent starts up again.

International opinion polls have placed Iceland in a strong competitive position as a safe, high-quality tourist destination – with much-sought-after natural wilderness – when world travel to some extent starts up again

Competition between airports has never been fiercer, but Keflavík Airport will be in an optimal position once more when travel restrictions are relaxed, e.g. as regards flights connections between continents. We shall weather the storm and be thoroughly prepared when the time comes. Isavia has earmarked considerable sums of money for market support to airlines, with a view to speeding up development efficiently as soon as possible.

To that same end, the company resumed building work under Keflavík Airport’s development plan at the beginning of this year, following an increase in the company’s share capital. This work will make the airport more competitive going forward and create a better experience for both airlines and passengers using the airport for transit or travel to and from Iceland. The work will also create many jobs in Suðurnes – a very welcome development in the difficult employment times currently affecting the region.

I should like to thank the company’s management and staff for the fine work they have done in these challenging times. Isavia takes its role of operating and developing one of the key pillars of the Icelandic economy very seriously and intends to discharge this responsibility fully going forward.

Orri Hauksson, Chairman of the Board of Isavia