Icelandair Group has signed an agreement with DB Schenker in a deal that secures a minimum of 45 cargo flights. As part of the agreement, Icelandair will be redesigning 3 Boeing 767s to cater for cargo by removing all the seats.
The agreement with DB Schenker is for a minimum of 45 flights connecting Shanghai, China to Munich, Germany. Furthermore, flights connecting Shanghai with Chicago (via Iceland) are also part of the agreement, Icelandair Group says.
Icelandair has been hit hard by the coronavirus crisis. Icelandair will be releasing its Q1 2020 results next week which are expected to show a significant decline in revenues.
In its 2019 annual results, Icelandair recorded a deeper net loss in comparison to 2018. The group recorded a net loss of USD57.8 million compared to a USD55.6 million net loss in 2018. The Boeing 737 MAX grounding has had a significant impact, considering the aircraft was due to replace Icelandair's older planes.
"The MAX suspension had an unprecedented negative impact on Icelandair‘s operations, resulting in lost revenue, increased expenses and restricted utilization of the Company’s fleet and crew," explains the President and CEO of Icelandair Group, Bogi Nils Bogason.
Passenger numbers were up 6% totaling over 4.4 million passengers. For 2020, the carrier originally anticipated more than 4.5 million passengers - a number which has likely changed. The coronavirus crisis, coupled with Boeing 737 MAX delays, has likely led to some serious issues at Icelandair.
The financial compensation involved in the latest agreement for cargo operations is confidential, the group says.
Bogason explained: "This is an important agreement for Icelandair Group during times of significant loss of revenue from our passenger network following the COVID-19 outbreak. In this project we combine our expertise on cargo transport and organising charter flights around the world. One of the key strengths of Icelandair Group is the flexibility to be able to respond quickly to opportunities and execute them in a short period of time. It is also a pleasure to participate in such an important project and find innovative solutions that contribute to the fight of the global pandemic that the world is currently facing.“