Icelandair Group said in its annual earnings release that it has decided to reactivate two B757-200s and extended the operating life of four units of this type to cover for the absence of its B737-8s and B737-9s.

Icelandair (FI, Reykjavik Keflavik) had already disclosed earlier that it will also dry-lease three B737-800s. ch-aviation understands that two of them will be sourced from Slovakia's Air Explore (ED, Bratislava).

The Icelandic holding said that "the suspension of the MAX aircraft had an unprecedented impact on Icelandair’s operations in 2019". The new Boeing narrowbodies were supposed to provide over a quarter of Icelandair's total capacity last year.

The airline took delivery of five B737 MAX 8s and one MAX 9 before the mid-March grounding. It also expected another one 8 and two 9s to delivery in 2019. Facing the absence of nine aircraft in total, Icelandair retained twenty-two B757s compared to the original plan of 19 active in the high season. It also operated with no spare aircraft and had to wet-lease five aircraft.

The airline's original fleet plan for 2020 included the operation of eighteen B757s, four B767-300(ER)s, and nine B737 MAX. However, its new "contingency plan" foresees the use of twenty-four B757s (including twenty-two B757-200s and two B757-300s), four B767s, and three wet-leased units.

As the airline has secured wet-leased capacity earlier and on better terms than last year, it expects that the "financial impact of this further suspension will be considerably less than in 2019".

Icelandair said it reached two "partial compensation agreements" with Boeing, without disclosing any details. However, it added that even taking these agreements into account, the financial impact of the grounding translates to "around USD100 million in 2019 at EBIT level". Icelandair said it was in further talks with Boeing.

The airline added that it continues to "review" its long-term fleet strategy, with three options under consideration: maintaining the current strategy, adding Airbus aircraft to supplement B737 MAX, or transitioning entirely to Airbus equipment.

Editorial Comment: Updated the article to clarify that the B737-800s will be dry-leased, not wet-leased. - 13.02.2020 - 00:59 UTC