Our exceptional team of employees is one of the robust foundations of our business. All employees are a part of the same team and Icelandair's core values – passion, simplicity and responsibility – are the principles that guide us to maintain a strong and motivating company culture. We have a diverse workforce with employees representing many different skills, both personal and professional and they represent 35 different nationalities. We commit to uphold human rights and fair labor practices and our employees adhere to the Company’s Code of Ethics which can be found on Icelandair's website. All employees are provided with equal opportunities and equal rights as an integral part of Icelandair’s Equal Rights Policy and Equal Rights Plan. Our equality plan ensures active equality efforts within our Company. This plan addresses various aspects, including equal pay, vacancies, training, work-life balance, and measures to prevent workplace harassment. The purpose of the Equal Pay Policy is to ensure gender pay equality within the Company through the implementation of an Equal Pay System. Icelandair commits to ensure that equal wages are paid for jobs of equal value, irrespective of gender. Icelandair’s comprehensive Health & Attendance Policy applies to all employees working for the Company and its purpose is to preserve employee health and includes various health-related programs and initiatives to further our employees' health and wellbeing.

Our key takeaways from our Double Materiality Assessment (DMA), which forms part of the CSRD, in terms of our own workforce are:

The following sub-topics were identified as material:

S1.1 Working conditions

S1.2 Equal treatment and opportunities for all

S1.3 Other work-related rights

It is imperative that our employees have and display a growth mindset where they are both willing and able to learn and develop so both may gain. To that end, Icelandair's People & Culture team has taken measures to supply our diverse employee groups with access to market leading learning and development material. By the same token, Icelandair upholds high safety and security standards and has in place detailed action plans designed to achieve these goals with mandatory training carried out for all employees working roles that are designated as part of aviation safety and work environment that is considered risk to occupational health and safety.

The year 2023 was unprecedented when it comes to employee training at Icelandair, not only was this the most extensive training period in Icelandair’s history but also the most extensive in Icelandic aviation history. This period understandably did put a heavy strain on the Company’s infrastructure, but the quality of the training and safety were always top priority. The number of students trained during the year were around 6,800 but that number does not reflect the number of individuals as some employees received more than one type of training.

Regulatory training is under constant review and development due to changes in regulations and emerging new challenges in the aviation environment. The training department takes on challenges with solution-minded approach and passionate care for the efficient and safe operation of our fleet.

Among the challenges in 2023 was the unprecedented volume of crew training, at the same time that the training center is adapting to temporary restraints of space and facilities due to the construction of new Icelandair headquarters in Hafnarfjordur.

Continuous improvement of training is our hallmark. The development is based on best practices of teaching and learning, and varied teaching methods, as well as the introduction of new technology such as Virtual Reality.

Icelandair is one of the world leading airlines in introducing full implementation of Evidence Based Training for pilots, which will take effect in March 2024 subject to approval of the authorities. Icelandair has also embraced EASA‘s emphasis on Competency Based Training, and to that effect both type rating of pilots, and line assessment of Cabin Crew has been upgraded.

Practical training is an essential part of crew training and the easy access to training equipment has been a great resource in achieving the goal of providing our crew with class leading training. In 2023, a decision was made regarding the future fleet of Icelandair with a purchase agreement with Airbus. The introduction of the Airbus aircraft is in full preparation and the training department is looking forward to that project.

The training of our aerodrome and technical employees varies according to their functions and is subject to different regulations.

All new employees go through orientation training which includes e-learning about the Company, health and safety training and a one-day presentation tour to our main locations when they commence their employment with the Company.

Approximately 20% of the company’s employees are not covered by air operations regulations. Nonetheless, Icelandair recognizes the importance of providing quality training and education that contributes to improving skills in the workplace. The employees perform a wide range of roles, and a needs analysis is conducted every year to assess their educational needs. In 2023 more than 80 courses were offered, with over 2,000 employees participating.

Every month, People & Culture present an ambitious training schedule for employees, which includes on-site and electronic courses. We have a wide range of e-courses available through our educational system, and we encourage our employees to use them for both personal and professional growth.

We have established a leadership development program, called Flightpath, for employees who have been identified as top-performers with potential for development into leadership roles. We ensure that we have an equal gender ratio among employees selected to participate in the program. The training program consists of nine modules such as Leadership, Decision Making, Coaching, Airline Operations and more. The first group to participate finished the program in 2023, 16 employees – eight women and eight men.

One of Icelandair’s sustainability focus areas is gender equality. We emphasize equality, diversity and non-discrimination. Icelandair promotes equality by providing equal job opportunities and fairness for employees and job applicants. Rich emphasis is on building diverse teams and any discrimination is not tolerated. Diversity in our leadership team is especially important.

Achieving gender equality across the Company's operations remains one of our core focus areas when it comes to sustainability and we continue our efforts towards our long-term goals in this area. We have set targets in line with IATA's "25by25" equality project about gender equality within management, pilot roles, cabin crew positions and aircraft maintenance.

We have made considerable improvements when it comes to gender equality in recent years

Before Covid, Icelandair was among the airlines that had the highest proportion of female pilots in the world, or 12%, however the effects of Covid-19 changed the landscape for female pilots significantly and the proportion of female pilots had dropped to 5% in 2021 but with the changes following the pandemic the proportion went up to 14% in 2023 and male cabin crew members are now 15% as the Company is able to continue to hire more men in seasonal cabin crew positions. The gender balance within aircraft maintenance roles has not changed over time and is still over 99% men.

The first step to ensure equal opportunities is to reduce the impact of gender stereotypes by showing strong role models and introduce the jobs to women and other genders where they are underrepresented and to men where they are underrepresented. Icelandair needs to ensure that the roles offered at Icelandair are appealing and available for everyone. All job advertisements state that Icelandair welcomes and encourages people of all genders to apply for all available jobs. Icelandair emphasizes to base decisions of recruitment, work conditions, distribution of work, delegation of working groups, training, and development on neutral and professional work methods, which are not influenced by gender, religion or origin and create diverse teams.

In Iceland, organizations with more than 25 employees are required by law to obtain an Equal Pay Certification. This certification, based on the equal pay standard, ensures that pay procedures and decisions are objective and free from gender-based discrimination. Enforcement of the Equal Pay Policy is in line with the Equal Pay Certification and ensuring full observance of gender equality in decisions on wages is the responsibility of management and they will annually establish equal pay objectives based on measurements derived from a pay analysis, aiming for less than a 3% difference of the gender pay gap. In 2022 the program was recertified for 2022-2025.

Gender pay ratio - regular earnings:

General health and well-being of Icelandair's employees is a priority where the Company is committed to providing an attractive and exciting place to work where people can thrive at their best. The Health & Attendance Policy outlines how risk is managed and how zero accidents culture is obtained by a number of measures, one being that all incidents must be recorded. Promoting good health among employees is high on the Company's agenda and initiatives have been launched with the overall aim of improving the well-being of all employees. Further to this the Company has a service agreement with the health protection service, Heilsuvernd, on confidential medical services ensuring employees' access to health care.

Icelandair continued to implement the EASA regulation 2018/1042 in 2023 which includes technical requirements and administrative procedures related to introducing support programs, psychological assessment of flight crew, as well as systematic and random testing of psychoactive substances to ensure medical fitness of flight and cabin crew members.

The Company is proud of how its team of people has adapted to a new hybrid work model based on the policy Flexible working @ Icelandair. The aim of the policy is to provide employees with the flexibility and opportunity to work remotely when the job does not require them to be onsite. In addition to increased flexibility and good work-life balance for employees, this policy also gives the Company an opportunity to recruit and employ the best talent for the organization irrespective of location and reduce carbon footprint by decreasing unnecessary transportation. In the past year the Company continued emphasizing strong communication and information flow from the leadership team and necessary support in remote working.

According to Icelandic law and our Company policies, all employees are entitled to parental leave which is a leave of absence from paid employment. The duration is 12 months in total. Each parent is entitled to six months and six weeks are transferable. Recognizing the importance of both parents in raising kids and making it possible for both parents to be actively involved, both at home and at work.

Icelandair respects human rights, as set out in the UN Universal Declaration of Human Rights and requires all its employees to treat others with trust, dignity, respect, fairness and equity. Icelandair has implemented an e-learning module on the Company's Code of Conduct which has been mandatory for all new employees from 2020. All cabin crew members have been trained in relation to human trafficking awareness and preventive actions.

Icelandair has a clear policy against bullying, sexual and gender-related harassment, and violence in accordance with the Act No. 1009/2015, in addition to also having rules on procedure for whistleblowing in accordance with Act No. 40/2020.

To simplify the process of announcing undesirable behavior or breach of legal obligations or other reprehensible misconduct within the Company, it implemented a simple online announcement tool for employees, which is called Tilkynna.is. The tool provides the possibility to send a comment regarding a behavior with a name included or anonymously. The announcer receives access to a communication channel where further information can be provided and updates can be received on the matter reported. All managers received appropriate training and open lectures were held for all employees.

Icelandair measures its working environment and cultural alignment both through regular monthly pulse surveys and also through an annual workplace audit. In 2023 one of our corporate objectives was to Reinforce our culture of passion and care and the objective was to develop the net promoter score to at least 35. The 2023 audit showed that 55% of the employees were engaged. This means that the attitude of the majority of the employees was positive both towards their daily job and towards the Company. The majority of the employees were therefore more productive and strived to develop themselves and the Company.

This critical element of our Company culture is further supported with a high employee net promoter score of 40 (comprised of percentage of promoters less percentage of detractors) achieving the objective. These two important measures from the workplace audit both show and reinforce the efficacy and effectiveness of our People & Culture strategy.