Icelandair Group cargo division edges back into operating profit

Icelandair Group has recorded an improvement in its cargo operation, with a return to operating profit in the first quarter.

The company stated that it is “on track” to deliver a full-year operating profit in the division after implementing a number of efficiency measures.

The company’s cargo business reported a first-quarter operating profit (ebit) of $19,000 compared with a loss of $3.8m for the same period last year.

The cargo business’s overall loss for the quarter narrowed to $457,000 compared with $3.6m during the same period last year.

It reduced freight capacity by 9% as part of this efficiency effort. The company said capacity was consequently “better aligned” with demand, with flown freighter block hours 35% down on last year.

One of the carrier’s freighters has been placed on long-term lease.

As a result of the measures, Icelandair Cargo’s revenues of $20.7m for the first three months were down 13%.

Chief executive Bogi Nils said the positive operating figure in February and March demonstrates a “great turnaround” compared with last year.

The cargo division narrowly edged into operating profit for the three months, contrasting with a $3.8m loss last year.

Icelandair Group says the cargo business last year was “difficult” and that – along with leasing out a freighter – it has adjusted the cargo flight schedule and made organisational changes, measures which are “now starting to pay off”.

Icelandair Group expects to turn round loss-making cargo division this year