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Message from The CEO

It is no exaggeration to say that 2020 has been a demanding year for airport operations and air navigation the world over. The Covid-19 pandemic took control over all our daily activities, and Isavia was no exception. Few words are necessary, as the figures speak for themselves.

Total passenger numbers fell by around 81% in 2020. This fall was around 93% for the period April–December 2020. In April and May, passenger numbers fell by over 99%. Conventional operational austerity measures are obviously not adequate in the face of such a disaster. Air navigation operations and domestic flights tell a similar story. In 2020, there was an over 58% decrease in traffic in Icelandic air traffic control area and a 51% decrease in the number of passengers departing on scheduled flights from domestic airports.

It should not be forgotten either that 2019 brought external challenges related to the collapse of WOW air and the grounding of all Icelandair’s Boeing 737 MAX aircraft. This led to a 26% decrease in passenger numbers at Keflavík International Airport in 2019, as compared to the year before. It can therefore be said with confidence that recent years have involved expending a great deal of energy in dealing with external disruptions over which the company has no control.

At the end of March last year, it was clear that Isavia was entering a period of great uncertainty, for which it was almost impossible to make an educated attempt at setting priorities. At the same time, the focus from the outset was to ensure that our response was considered and that every effort would be made to protect jobs and the infrastructure that the company operates. It was essential not to cut back on operations to such an extent that it would affect the company’s ability to rise again. Despite this, the company had no option but to make around 300 people redundant last year, mostly from the parent company that operates Keflavík Airport, as there was simply no work for many employees to do as a result of Covid-19.

In the first days of the pandemic, great emphasis was placed on securing the company’s financing and access to liquidity, in order to give it room to continue operating while Covid-19 made itself felt. This went well, and today the company’s access to liquidity is still good. It can be said that the company has been successful in navigating the pandemic – despite the uncertainty it has brought with it – and in protecting infrastructure at Keflavík International Airport.

We have heard a great deal in recent years about how flight connections are one of the main ways in which a country can create and maintain economic growth.

There are many lessons to be learnt from disruptions of this type. One lesson is the importance of having the courage to seek out opportunities in adversity. We have heard a great deal in recent years about how flight connections are one of the main ways in which a country can create and maintain economic growth. This concerns not only tourism, but also exports of goods and services, access to education and culture, to name but a few examples.

Investment in airport infrastructure is one of the key aspects in increasing and maintaining the number of flight connections. Naturally, the company’s first reaction when the pandemic struck was to cut back significantly on building works, in order the stem the outflow of capital, given the total uncertainty ahead. Last autumn, however, a major achievement was the securing of capital by Icelandair, Isavia’s largest customer. This reduced the uncertainty surrounding, for instance, the status of Keflavík Airport as a transit hub.

In recent years, we have been working on the next steps in the development programme for Keflavík Airport. The company is now forecasting that passenger numbers at Keflavík Airport will have reached pre-Covid-19 levels no later than 2024. It could happen earlier; it could happen later. But in order to continue to ensure the foundation for flight connections looking forward, it is important to set to work now on continued development of Keflavík Airport.

This brings us to another lesson – the importance of being able to see through the current storm and perceive the opportunities of the future. Furthermore, restarting the development programme will create many job opportunities in Suðurnes, the region of Iceland most affected by the pandemic in terms of jobs.

Another lesson is solidarity. In recent months, the company has been working on securing further capital to give it room to launch building projects that will benefit not only the airport in the future, but also constitute an important contribution to Suðurnes. Thanks to the concerted efforts of all concerned, this work was completed extremely quickly, and early this year the Ministry of Finance and Economic Affairs decided to increase its share capital in the company. This enabled us to launch numerous building projects at Keflavík International Airport requiring large amounts of human resources as early as this year.

At times such as this, it is particularly important to not lose sight of the importance of environmental issues and sustainability. In recent years, Isavia has been making great efforts to ensure future sustainability. We see many opportunities for Iceland’s competitive advantage going forward to be directed at environmental issues and sustainability, and we intend to pursue them.

At times such as this, it is particularly important to not lose sight of the importance of environmental issues and sustainability

Isavia has been a party to the UN Global Compact since 2016. As such, Isavia undertakes to ensure that its work practices are in accordance with the ten basic UN criteria on human rights, work issues, environmental issues and action against corruption.

We are targeting issues in a number of fields, and the company sets itself high standards in this respect every year. Objectives and related improvement projects have been selected with reference to the company’s policies, comments from external stakeholders, the criteria of the UN Global Compact, the United Nations Global Goals and related government priorities. The objectives for 2021 are linked to eight of the seventeen Global Goals.

This is Isavia’s fifth annual and social responsibility report, issued according to the criteria of the Global Reporting Initiative. This year’s report is drafted in accordance with Core GRI Standards, together with GRI-G4 special provisions for airports. These special provisions deal specifically with the challenges and opportunities faced by airports when it comes to sustainability. Consideration is given to the company’s operations and to their impact on the economy, the environment and the community. The report is being issued online for the third time. A large number of employees from all departments within the company were involved in preparing the report, and we recruited an external consultant to review and ensure the reliability of the information. We welcome any and all comments on the content of the report, as continuous improvements are an integral part of our operations.

This social responsibility report describes the operations of Isavia in 2020. The report is published as a progress report toward our goals as regards the UN Global Compact Convention (UNGC). We thereby confirm our wish to work in accordance with the Ten Principles of the UN and work towards the Global Goals. We declare our continued support of the UN Global Compact.

Last year was extremely difficult for all of us. We have all needed to make sacrifices in one way or another and deal with a radically new set of circumstances, both at work and in our personal lives. Many people have also lost their jobs. Many companies are still struggling, and there remains uncertainty as to when the recovery will begin. Isavia staff have met these challenges exceedingly well, and I should like to thank them very much for their fine work. However, we should not lose sight of the fact that we have already begun to turn defence into attack – and this is where we want to be.


Sveinbjörn Indriðason, CEO Isavia

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