Icelandair Group has now completed agreements with all its creditors and reached a final settlement with Boeing regarding the impact of the suspension of the Boeing 737-MAX aircraft.
While the details of the final settlement agreement with Boeing are confidential, it reduces Icelandair’s MAX purchase commitment by four aircraft. The parties have agreed to a revised delivery schedule for the remaining six MAX aircraft that are expected to join Icelandair’s fleet from Q2 2021 to Q1 2022. Furthermore, the settlement provides additional compensation for Icelandair which covers a substantial portion of the damages incurred from the suspension and will mostly be realized by Q2 2021. This agreement strengthens Icelandair Group’s liquidity position and allows for more flexible fleet planning in the upcoming years. The MAX aircraft continues to be an important element of the Company’s plan to strengthen its business and increase flexibility and capability for growth.
In addition to the Boeing settlement, agreements on concessions with creditors have been reached. The negotiations with creditors have focused on restructuring cash outflows to match expected cash inflows. The agreements are conditioned upon the completion of the upcoming share offering and the Company entering into an agreement regarding a government guaranteed credit facility.
Discussions on a term sheet for a credit facility guaranteed by the Icelandic Government and to be provided by Islandsbanki and Landsbankinn are in its final stages. The facility will among other things be conditioned upon the completion of the upcoming share offering.
As previously announced, long-term collective bargaining agreements have already been completed with the pilot-, cabin crew- and aircraft maintenance unions which will increase the Company’s flexibility and competitiveness going forward.
As all agreements with key stakeholders have been completed, the Company intends to publish an information memorandum and a timeline for potential investors in the upcoming share offering in the next few days.
Contact information
Investors: Iris Hulda Thorisdottir, Director Investor Relations. E-mail: iris@icelandairgroup.is
Media: Asdis Petursdottir, Director Communications. E-mail: asdis@icelandair.is