Despite the fact that the year 2021 continued to be characterised by the COVID epidemic, there were nonetheless clear signs of improvement in airport operations and air traffic control over the previous year.
If we, for example, view the last quarter of 2020, an average of 600 passengers passed through the airport each day. During the corresponding period last year, this average reached 9,064 passengers per day, which is 58% of the daily average in the last quarter of 2019.
At the same time, most airlines that flew to Keflavík Airport before the COVID epidemic have returned, and today, there is every likelihood that their number will at least be the same this summer as it was in 2019. This means that we can expect continued results of the recovery in the coming months and years. Part of the reason the recovery was slow was due to the infection restrictions in effect at the border of Iceland. These restrictions ceased last February, since available data showed that they were not justified and caused more harm than good. It is satisfying to see that the public authorities have thus begun to view the overall picture in their decisions, and it is important that their decisions will be foreseeable for the future.
Isavia embarked upon a new offensive at Keflavík Airport at the beginning of last year in the wake of the decision of the Minister of Finance and Economic Affairs to increase the share capital of the company. This year will be one of the largest investment years in the history of the airport, and in addition thereto, the company has invested in direct marketing to airlines, which has resulted in the aforementioned recovery of the number of airlines. This effort plays a key role in the recovery of the number of air connections as they existed in the years before the COVID epidemic. The Keflavík hub is the prime motivator for air connections, and it must therefore be ensured that it will provide opportunities for connecting airlines at Keflavík Airport. There is a direct correlation between the number of aircraft connections and economic growth, the standard of living and prosperity in Iceland, so this emphasis on the airport as a hub is important not only for Isavia, but also for the nation as a whole.
In addition to the operation of Keflavík Airport and under Isavia as a parent company, there is the operation of the Duty-Free Shop at Keflavík Airport, the operation of the domestic airport system as well as the air traffic control service.
- The operation of the Duty-Free Shop has also been affected by the COVID epidemic since it is very dependent on traffic to and from Keflavík Airport. On the other hand, we have been successful in aligning the operations to changed circumstances, and the company is moreover well situated to meet the challenges associated with the recovery.
- The revenue of Isavia Innanlandsflugvellir ehf. (Domestic airports) comes largely from a service agreement with the Icelandic state on their operation. The COVID epidemic has had a profound impact on operations, whereas the state, as service procurer, simultaneously made the decision not to reduce the level of service in the domestic airport system and appropriated special supplementary payments to the company to meet the shortfall in revenue from users. The state of the domestic airport system is nonetheless serious, as it has been underfinanced by the state for many years.
- The air traffic control system of Isavia is provided by the subsidiary Isavia ANS. The largest part of the revenue of the company comes from an agreement on overall air traffic control over the North Atlantic. This agreement provides for the mitigation of revenue and expenditure so that the economic effect of the COVID epidemic will to a large extent be evened out in coming years.
The international airports that will be markedly successful over the next several years, when it comes to sustainability, will enjoy an important competitive advantage into the future. In light thereof, it is especially important not to lose sight of the importance of the environment and sustainability in spite of repeated challenges from the COVID epidemic. In recent years, Isavia has taken large and important steps in the direction of sustainability, and such steps will in coming years be larger and more important still.
Isavia has been a participant in the UN Global Compact since 2016. With its participation, the company is committed to operating in accordance with the ten criteria of the United Nations on human rights, labour issues, the environment and measures to combat corruption.
At the end of the year, a new sustainability policy was adopted for the company. It is accompanied by a five-year action programme whereby the emphasis of the company, its objective and metrics for these criteria are stated. In choosing them, regard was had to the policy direction of the company, inputs from economic actors, the UN Global Compact criteria and associated objectives of public authorities.
For the seventh time, Isavia is issuing an annual report in line with the criteria of the Global Reporting Initiative. The report is prepared according to the Core GRI Standards along with special provisions of the GRI-G4 regarding airports. The special provisions are specifically meant to bring on the challenges and opportunities facing airports when it comes to sustainability. Regard is had to the operations of the company and the impact it has on the economy, the environment and society as a whole. A large number of the staff throughout all areas of the company participated in this work, and the advice of consultants was also sought to ensure the quality of information in the report. We welcome all comments on the contents of the report, since continual improvements are an inseparable part of our work.
In this report, we describe the activity of Isavia in 2022. The report is submitted as a progress report on our objectives towards the UN Global Compact. We thereby confirm our intent to work in conformity with the ten Global Compact criteria of the United Nations. We declare our continued commitment to the UN Global Compact.
These last two years have been full of a range of challenges due to the COVID epidemic. We at Isavia have nonetheless embarked upon an offensive last year, as there are many opportunities in safeguarding our standard of life and wellbeing in Iceland. We at Isavia are fortunate to have a great staff that time and again has made us proud and convinced us that we can meet the great responsibility we face.
I would like to use the opportunity to thank our entire Isavia team for helping us to surmount the challenges of recent years, especially for being prepared to move ahead to face the future.
Sveinbjörn Indriðason, Managing Director of Isavia