Execution of a Share Repurchase Program The Boar

The Board of Directors of Icelandair Group hf. (the “Company”) has decided to execute a share repurchase program in order to reduce the share capital of the Company. This decision was made following authorisation given by the Annual General Meeting on the 10th of March 2016, which gave the Board of Directors permission to execute a share repurchase program where up to 10% the Company’s shares would be purchased within a period of 18 months.

The share repurchase will at most amount to 114 million shares or 2.28% of the total share capital. Currently, the Company owns 25,000,000 of its own shares, or 0.5% of the total share capital. However, shares will not be purchased in excess of a total value of 1.700 million ISK. The share repurchase program will be valid until the end of the 8th of September 2017. The financial services company Virding hf. will manage and operate the repurchase program, and will make all trade decisions regarding share repurchase and the timing of such purchases independently from the Company.

The execution of the share repurchase program will be in accordance with Chapter VIII. of Act No. 2/1995 on Public Limited Companies and Chapter II of the Annex to Regulation No. 630/2005 on Inside Information and Market Abuse, with later amendments. Share repurchase based on the share repurchase program will be performed in stages, and shall be performed so that share purchase within a single day will not exceed 4,679,224 shares or 25% of the average daily trading of the Company’s shares on the Nasdaq Iceland Stock Exchange in January 2017. The price of each purchased share within the program shall not be in excess of the highest last impartial spot market price, or the highest recent impartial share purchase offer in the Nasdaq Iceland Stock Exchange, whichever is higher.

The purchase of shares performed under the share repurchase program will be announced no later than at the end of the seventh trade day after such purchase has been made.

For further information, please contact:

Bogi Nils Bogason, CFO bogi@icelandairgroup.is Tel: +354 665 8801