Skip to main content

ECONOMY

All areas of the company’s operations saw expansion. As before, expansion in services for international travel was the major factor in this growth.

Isavia’s financial position has strengthened considerably in recent years in line with its increased scope of operations. This is an important prerequisite to enable the company to cover the increased leveraging with the necessary developments ahead. The company has embarked on extensive and costly construction at Keflavík Airport over the past few years in order to respond to the significant growth in traffic.

During 2013–2016, investments were made amounting to approximately ISK 28.4bn in construction and renovations, and the company’s forecasts assume tens of billions in investments in the coming years.

A MAJOR INDUSTRY IN STEADY GROWTH

Isavia, the Icelandic authorities, the airlines and other stakeholders have been successful in promoting Keflavík Airport as a destination, particularly outside peak hours. Passengers outside peak hours have grown proportionately faster than during peak hours. The decision of the Icelandic airlines to add wide-body jets to their fleet has had a significant impact on the operation of the airport.

Keflavík Airport is the largest gateway into Iceland and is one of the most important individual aspects in the infrastructure of the tourism industry.
It is important that care is taken as regards the enlargement plans for Keflavík Airport, which are necessary for the airport to be able to welcome the growing number of passengers in the future.

The development of the airport has great potential of becoming profitable, both as regards the operation of the airport itself and the Icelandic economy as a whole. It is, however, important to keep in mind the overheating effects of the development and ensure that the build-up goes hand in hand with the sensible forecast of the increase in passengers and opportunities relating thereto.

In addition, it is important that other infrastructure grow in tune with the enlargement of the airport, such as policing, healthcare, monitoring bodies and the road system.
Icelanders are frequent flyers in comparison to other European countries, according to a recent study carried out by the ACI (Airports Council International). The number of direct jobs at airports per capita are only exceeded by Luxembourg.

Direct jobs in the companies who have operations in Keflavík Airport have increased rapidly in conjunction with the increased number of travellers. The number of direct jobs was 5,600 in 2016, 1,300 of which were new jobs created during the year.

Based on the possible development of passenger numbers, it is estimated that 476 new jobs will be created at the airport each year. These jobs will be spread between many companies that have operations at the airport, and around 40% will be directly linked to the Icelandic airlines (pilots, cabin crew, etc.). Other jobs are in the numerous other services provided at the airport. Some companies at the airport have had to seek employees overseas, and it is clear that the airport will increasingly have to draw workers from the Greater Reykjavík Area and South Iceland. It is, therefore, extremely important to improve transport means to the area. By the end of 2016, approximately 3% of the total workforce in Iceland was directly linked to the operations of Keflavík Airport.

SCOPE OF OPERATIONS

Two factors have the greatest impact on the scope of Isavia’s operations: The number of flight movements and the number of passengers.

As a whole, the company’s operations have widened in scope as compared to last year. In 2017, passenger numbers at domestic airports increased by 3%; at Keflavík Airport, passenger numbers increased by 28%; and traffic in Icelandic airspace increased by 12% in 2017.

SCOPE OF AIRPORTS AND INFRASTRUCTURE

Three aircraft operators ran scheduled flights within Iceland, i.e. Flugfélag Íslands, Flugfélagið Ernir and Norlandair. Other aircraft operators who regularly used Isavia services were Mýflug, Atlantsflug and Norðurflug. Vesturflug/Blue West and Helo operate a helicopter service at the company’s airports.

SCOPE OF AIR NAVIGATION SERVICES

The largest customers of Isavia’s flight navigation services are Icelandair, WOW air, United Airlines, Emirates, Delta, SAS, Lufthansa, British Airways, Air Canada and Qatar. These airlines fly the greatest number of kilometres within the Icelandic flight traffic control area. Icelandic airlines are the biggest users of flight navigation services at Keflavík Airport.

SCOPE OF OPERATIONS AT KEFLAVIK AIRPORT

The number of users of Keflavík Airport is constantly rising. Over summer 2017, 27 airlines flew from the airport to more than ninety destinations. Twelve airlines flew to and from Iceland all year round: Icelandair, WOW air, easyJet, Wizz Air, British Airways, Norwegian, SAS, Air Iceland Connect, Delta, Lufthansa, Finnair and Primera.

Numerous passengers take advantage of Keflavík Airport as a transit airport, and both WOW air and Icelandair use the airport for such purpose on routes between Europe and North America. The minimum flight connection time for passengers at Keflavík Airport is 25 minutes.

Isavia has, with the assistance of an incentives system, been quite successful in getting airlines to fly to Iceland over the winter months. In addition, Isavia has marketed time slots outside peak hours each day, with the aim of making better use of the airport’s facilities. There was a sharp increase in use of these slots in 2017.

CODE OF CONDUCT FOR SUPPLIERS

Isavia is a signatory to the United Nations Global Compact (UNGC) and has thereby committed to ensuring that its policies and practices comply with the UNGC’s Ten Principles on human rights, labour, the environment and anti-corruption. Isavia has adopted a Code of Conduct for Suppliers in accordance with the Ten Principles. Suppliers with which the Company does business are required to comply with the Code of Conduct and ensure that their suppliers do the same. Upon request, suppliers must be able to confirm their compliance with this Code of Conduct.
“Supplier” means a business or individual that provides Isavia with goods or services.
Isavia requires suppliers to act as follows:

LABOUR

FREEDOM OF ASSOCIATION AND THE RIGHT TO COLLECTIVE BARGAINING

Recognise and respect the right of employees to freedom of association and to enter into bargain collectively. If the right to freedom of association and/or to enter into collective bargaining is restricted by law in the country in question, the supplier must permit its employees to elect a representative to defend their rights in the workplace.

FORCED AND COMPULSORY LABOUR

Guarantee that their employees perform their work without force or compulsion and are free to leave employment with reasonable or statutory notice.

CHILD LABOUR

Not employ minors to perform work that is hazardous or detrimental to their health and safety. Children’s right to development, welfare and education shall be respected. Suppliers shall at least comply with the Convention of the International Labour Organisation (ILO) on the minimum age for admission to employment and work.

DISCRIMINATION

Ensure that their employees have equal opportunities and equal rights without discrimination on the basis of gender, race, religion, age, disability, sexual orientation, nationality, opinions, economic position, social background or position in any other respect. Suppliers shall create a work environment characterised by equality, tolerance and mutual respect.

WAGES, WORKING HOURS AND OTHER CONDITIONS OF WORK

Pay their employees regular wages (at least every month) and ensure that the payments, or any parts thereof, are not retained by intermediaries. Suppliers must pay at least the minimum wage stipulated by law, rules and/or collective agreements in the country in question. Suppliers must keep a record of wage payments and be able to demonstrate that such payments have truly been made. They shall respect laws and rules concerning the rights of employees, including rest, duration of work, sickness rights and other wage terms.

HEALTH AND SAFETY

Ensure that employees’ work environment is safe and without risk to health. Suppliers must comply with the laws and rules of the country in question with regard to conditions in the workplace and provide their staff with appropriate protective equipment and training in occupational health and safety. Suppliers must do everything in their power to minimise risk of accident and any negative effects on employee health.

HUMAN RIGHTS

Respect internationally proclaimed human rights. Suppliers must create and maintain an environment where employees are treated with respect and no mental and/or physical abuse or threats of such abuse are tolerated.


ENVIRONMENT

Isavia requires suppliers to be aware of the environmental impacts of their activities and to seek to minimise these in an effective manner.


ANTI-CORRUPTION

ETHICAL BUSINESS PRACTICES

Always work against corruption, including bribery, extortion and fraud. Suppliers must not offer, solicit, require, give or receive bribes, whether directly or indirectly, for themselves or others. Suppliers must operate in accordance with proper and sound business practices and customs and apply accepted ethical practices in their business dealings.

CONFLICT OF INTEREST

Avoid any conflict of interest in their business dealings with Isavia. Conflict of interest include, e.g., situation where a supplier’s representative, his/her relatives or friends may have a personal interest in the transaction in question. Suppliers must without exception report any potential conflict of interest to Isavia.