Icelandair Group is expected to begin a divestment process for its subsidiary Iceland Travel, a destination management company and tour operator, this coming autumn, the group has said in a statement.

Hordur Gunnarsson, who has led the company as managing director over the last decade, has resigned and will be replaced by Bjorn Viglundsson who comes from a senior position at Sýn, parent company of Vodafone Iceland.

Icelandair Group earmarked Iceland Travel for sale earlier this year when it announced a wide-ranging corporate restructuring. That restructuring was prompted by a loss at the group of ISK6.7 billion krona (USD54 million) during 2018, which it blamed on “an increase in competition on international fights, low-cost fares and higher fuel prices”.

The number of tourists at Iceland Travel reaching the country on Icelandair flights declined from a record 90,000 in 2017 to 76,000 in 2018, according to Icelandair Group's 2018 annual report.

The group said about Iceland Travel in the report: "Last year was characterised by a considerable drop in leisure sales during the high season. This drop can be attributed to a weakened competitive position due to a strong ISK at the start of the year, accompanied by high prices from service providers and increased competition from other destinations in the Nordic region. In response to this, Iceland Travel had to lay off employees along with other austerity measures."