Icelandair Group Announces New Name and New Leaders

COLUMBIA, MD, April 6, 2005 – Chairman Hannes Smarason announced at the annual shareholders meeting that The Icelandair Group had reached their highest profit in the history of the company, 3.4 billion ISK ($57 million USD) in 2004. Each employee will receive shares in the company worth 70.000 ISK ($1,200 USD) a total distribution of 170 million ISK ($2.8 million USD) to all employees.

In addition to the positive profit news it was decided that Flugleidir – Icelandair Group will now be known as “FL GROUP.” Chairman Hannes Smarason said, “This is to emphasize the fact that we are now an investment company.” “In the mind of Icelanders,” He continued, “the old name of Flugleidir is exclusively connected to our airline operations, which operates as Icelandair.” “For us here in Iceland,” he added, “the FL GROUP has historical meaning, the F coming from Flug (flight) and the L coming from Leidir (direction).” He concluded, “We are now an international company and need a more suitable name abroad.”

Organizational changes were also confirmed at the meeting. Ragnhildur Geirsdóttir will take over as CEO of FL GROUP and Jón Karl Ólafsson as CEO of Icelandair at the end of May. The FL GROUP will have two main functions, resource management and business development, which Einar Sigurdsson, SVP will lead and Finance. The name of the SVP for finance has yet to be announced. In addition, PR and IT functions will move to FL GROUP from Icelandair, lead by Guðjón Arngrímsson and Hjörtur Þorgilsson.

Icelandair U.S. gateways offer nonstop service from New York (JFK), Boston, Baltimore/Washington (BWI), Minneapolis/St. Paul, Orlando and San Francisco (starting May 18, 2005) to the airlines hub in Reykjavik, Iceland. Nonstop flights continue to Denmark, Norway, Sweden, Finland, Great Britain, Germany, Holland and France.

For additional information please contact your Professional Travel Agent, call Icelandair at (800) 223-5500 or visit www.icelandair.com