ICELANDAIR’S PARENT COMPANY REVISES CORPORATE STRUCTURE

Columbia, MD, November 17, 2005 - In a move designed to separate the airline and tourist service operations from investment activities, Icelandair, the national carrier of Iceland, has joined Icelandair Cargo, Loftleidir-Icelandic (charter/leasing), Icelandair Technical Services and Icelandair Ground Services to become the Icelandair Group, a subsidiary of the parent company FL Group. Jon Karl Olafsson, CEO for Icelandair, is now CEO for the Icelandair Group.

Hannes Smarason is CEO of the FL Group, which currently employs some 2,000 people and includes Bluebird Cargo and the FL Travel Group, along with the Icelandair Group. The fourth division under the FL Group is the recently acquired Sterling Airways, which merged with Scandinavian carrier Maersk Air to become the fourth largest low-fare airline in Europe with 46 destinations in Continental Europe. FL Group plans to take over the operation of Sterling on January 1, 2006.

Icelandair offers flights from its US gateways in Boston, New York, Baltimore/Washington, San Francisco (seasonal), Minneapolis/St. Paul and Orlando. Reykjavik serves as the airline’s hub in Iceland, with easy connections to Amsterdam, Copenhagen, Frankfurt, Glasgow, London, Oslo, Paris, Stockholm and additional seasonal destinations in Scandinavia, Great Britain and Continental Europe. Reservations and flight information are available at (800) 223-5500 or online at www.icelandair.com.

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