Supplement to the Prospectus of ATLANTIC AIRWAYS P/F. Dated 9 November 2007

Transkript

1 Supplement to the Prospectus of ATLANTIC AIRWAYS P/F Dated 9 November 2007 Listing of all the shares in Atlantic Airways P/F on NASDAQ OMX Copenhagen Stock Exchange (Dual Listing) 27 OCTOBER 2008

2 Resumé (Danish Translation of Summary) Følgende resumé er en oversættelse af det oprindelige resumé, som er udfærdiget på engelsk. Såfremt den danske oversættelse ikke er i overensstemmelse med det oprindelige resumé på engelsk, er det den engelske tekst, som er gældende. Det følgende resumé bør læses som en introduktion til og i forbindelse med tillægget dateret 27. oktober/november 2008 og prospektet dateret 9. november Resuméet kvalificeres i sin helhed ved yderligere detaljeret information udtrykt andetsteds i disse dokumenter. Enhver beslutning om at investere i denne aktie bør af investor tages ud fra tillægget og prospektet set under eet. Hvis et søgsmål i forbindelse med indholdet i tillægget/prospektet skulle blive forelagt retten, bør sagsøgende investor, i henhold til den nationale lovgivning i medlemsstaterne, bære omkostningerne ved at oversætte tillægget/prospektet, før sagen lægges for retten. Civil ansvarspådragelse kan gøres gældende overfor de personer i ledelse og bestyrelse, som har undertegnet resuméet inkl. mulige oversættelser heraf, og som har søgt om at få notificeret dette, men kun hvis resuméet er vildledende, ukorrekt og inkonsistent læst i sammenhæng med de andre dele af prospektet. Formålet med dette tillæg er at søge om optagelse og handel af alle aktier i Atlantic Airways P/F på NASDAQ OMX Copenhagen A/S. Det forventes, at alle aktier i Atlantic Airways P/F er noteret på NASDAQ OMX Copenhagen børs i oktober eller november Derefter er Atlantic Airways aktier listet både i NASDAQ OMX Iceland og NASDAQ OMX Copenhagen (dual listing). Ledelsen og bestyrelsen ser nedenfor stående information som signifikant ny information, og har ud fra den betragtning klargjort og offentliggjort dette tillæg. Der har ikke været yderligere signifikante begivenheder, og ingen signifikante nye begivenheder har været siden offentliggørelsen af prospektet dateret 9. november Siden offentliggørelsen af prospektet 9. november 2007 har Atlantic Airways P/F udstedt børsmeddelelser med signifikant information under følgende overskrifter: Resultat af udbud november 2007 I perioden november 2007 blev alle aktier, der var sat til salg i den første privatiseringsrunde af Atlantic Airways, solgt. Prisen blev fastsat til 261 DKK pr aktie på basis af en bookbuilding process. Dette svarede til maksimumprisen i det udbudte prisområde. På basis af den fastsatte aktiepris var den totale værdi af Atlantic Airways aktiekapital 270 millioner DKK investorer blev i udbudsperioden udvalgt til at købe aktier i det færøske flyselskab. Finansielt overblik Omsætningen i 2007 gik fra 519 millioner DKK til 539 millioner DKK ifølge årsrapporten Resultatet før skat 2007 blev 29 millioner DKK, mens resultat efter skat blev 23,8 millioner DKK. Selskabet har udbetalt 6 millioner DKK i dividende til aktionærerne. Egenkapitalen er steget til 214

3 millioner DKK, hvilket er 10 % højere end markedsværdien. Resultatet for 2007 er seks gange højere end resultatet for 2006, hvor resultat efter skat var 4 millioner DKK. Atlantic Airways resultat før skat for Q udgjorte et tab på 7,6 mio. DKK sammenlignet med et tab på 5,9 mio. DKK for samme periode sidste år. Selskabets resultat efter skat var 6,2 mio. DKK for første kvartal 2008 sammenlignet med et tab på 4,8 mio. DKK for samme periode sidste år. Atlantic Airways resultat efter skat var mere end 6 mio. DKK i andet kvartal 2008 sammenlignet med 17 mio. DKK samme periode sidste år. Resultatet for første halvår 2008 blev DKK sammenlignet med 12,5 mio. DKK i Samlet omsætning for første halvår 2008 blev 250 mio. DKK. Balancen pr. 30. juni 2008 var 484 mio. DKK, hvilket er 95 mio. DKK højere end ved starten af året. Egenkapitalen var 211 mio. DKK og solvens ratioen var 44 %. Market Making Atlantic Airways P/F og Eik Banki P/F underskrev den en Market Making aftale, hvor Eik Banki P/F fungerer som Market Maker for aktier udstedt af Atlantic Airways P/F. Som en konsekvens af den nye aftale med Eik Banki P/F, har Atlantic Airways P/F ophævet den eksisterende Market Making aftale imellem Atlantic Airways P/F og Kaupthing Bank hf. med effektiv ophævelsesdato den 29. juni Market Maker Eik Banki P/F besluttede den at suspendere Market Making aftalen på OMX Iceland børs indtil der kunne gives garanti for sikre handels- og clearing betingelser. Planmæssige ruter Selskabet vil i 2009 operere med en helårs forbindelse imellem Færøerne og København, Billund og Reykjavik. Flyselskabet har også besluttet sig for at fortsætte med sommerforbindelsen i 2009 fra Færøerne til London, Aalborg og Stavanger, og vil også operere på ruten mellem Reykjavik og Narsarsuaq i samarbejde med Air Iceland. Derimod er sæsonforbindelsen mellem Stavanger og Stockholm og mellem London og Shetland sat i bero på grund af højere driftsomkostninger. Charter ruter Selskabet underskrev i januar 2008 en kontrakt med SAS vedrørende wet-lease af tre flyvemaskiner med start sidst i marts 2008 og udløb imellem sidst i marts 2009 og sidst i maj Det har været en forudsætning for denne kontrakt, at parterne har underskrevet en secondment kontrakt, hvor Atlantic Airways leaser piloter fra SAS i kontraktperioden. Selskabet har også forlænget leasingen af to flyvemaskiner for at imødekomme efterspørgslen efter wet lease og charterture. Flåden I januar 2008 underskrev selskabet en kontrakt med Airbus om køb af en flyvemaskine af typen A319 med option til at købe yderligere et A319 fly på et senere tidspunkt. Flyet forventes at blive sat ind i En Avro RJ-85 flyvemaskine blev solgt og leaset tilbage i oktober Flyet er leaset tilbage i en 5-årig periode. I april 2008 modtog selskabet en ny Agusta Westland 139 helikopter.

4 Forretningsmæssigt Overblik I oktober besluttede Vága Floghavn P/F (Vágar lufthavn) at indtræde i en to-årig aftale med Atlantic Airways om at sælge toldfrie varer i Vágar lufthavn fra november Aftalen inkluderer salg af toldfrie varer både i ankomsthallen og i afgangshallen. Aftalen kan forlænges med eet år. Bestyrelsen Eyðfinnur Jacobsen har erstattet Erling í Liða som viceformand og som medlem af bestyrelsen ved den årlige generalforsamling af 3. april Der har ikke været yderligere ændringer i bestyrelsen. Majoritetsaktionærer Majoritetsaktionærer - der har en beholdning over 5 % af egenkapitalen i Atlantic Airways P/F er pr. 23. oktober 2008: Vinnumálaráðið/ Føroya Landsstýri (67.0%) Sp/f (5.6%) Egne aktier Antallet af egne aktier er på nuværende tidspunkt Den nominelle værdi er Dette er 1 % af den samlede aktiekapital. Den 18. juni 2008 købte selskabet egne aktier tilbage fra ledelsen til en aktiepris på 240 DKK pr aktie. Der var enighed i bestyrelsen om, at dette var en god handel. Aktieselskabsvedtægter Atlantic Airways P/F har offentliggjort en vederlagspolitik for bestyrelse og ledelse dateret den : Dette er en rettelse til aktieselskabsvedtægterne. Formålet med Atlantic Airways P/F s vederlagspolitik er at sikre en passende corporate governance i selskabet og at sikre den langsigtede værdi for selskabets aktionærer. Godtgørelse til hvert enkelt medlem af bestyrelsen og til medlemmer af den øverste ledelse er beskrevet i detaljer i årsrapporten og vil også blive offentliggjort på selskabets hjemmeside under Investor Relations. Implementering af IFRS i 2009 Rettelse af dato i Registration Document, side 60, hvor der står 2008, men skal stå Atlantic Airways vil anvende internationale regnskabsstandarder (IFRS) i regnskabsåret, som slutter 31. december 2009, hvilket vil inkludere sammenlignelige regnskabstal for regnskabsåret, som slutter 31. december 2008.

5 Summary The following summary should be read as an introduction to and in conjunction with the supplement dated 27 October 2008 and the prospectus dated 9 November The summary is qualified in its entirety by more detailed information stated elsewhere in these documents. Any decision to invest in the securities should be based on consideration of the supplement and the prospectus as a whole by the investor. Where a claim relating to the information contained in the supplement/prospectus is brought before a court, the plaintiff investor might, under the national legislation of the Member States, have to bear the costs of translating the supplement/prospectus before the legal proceedings are initiated. Civil liability attaches to those persons who have tabled the summary including any translation thereof, and applied for its notification, but only if the summary is misleading, inaccurate or inconsistent when read together with the other parts of the prospectus. The purpose of the supplement is to seek admission to list and trade all the shares in Atlantic Airways P/F on NASDAQ OMX Copenhagen A/S. It is expected that all the shares in Atlantic Airways P/F will be listed on NASDAQ OMX Copenhagen stock exchange in October or November After this, the Atlantic Airways P/F shares will be listed on both NASDAQ OMX Iceland and NASDAQ OMX Copenhagen stock exchanges (dual listing). The management and board of directors regard the following information as significant new information and accordingly have prepared and published the following supplement. There have been no other significant changes and no other significant new matter has arisen since the the prospectus dated 9 November Since the prospectus dated 9 November 2007 Atlantic Airways has issued announcements of significant new information under the following headings: Result of the offering November 2007 In the period November 2007 all shares offered for sale in the first privatisation round of Atlantic Airways were sold. The final price fixed on basis of the bookbuilding process was DKK 261 per share corresponding to the maximum price in the offered price range. On basis of the fixed share price the total value of Atlantic Airways share capital was DKK 270 million. In the subscription period 1,370 investors were chosen to buy shares in the Faroese airline company. Financial Overview Revenue in 2007 increased from 519 million to 539 million according to the Annual Report The Pre-tax profit for the 2007 was DKK 29 million, with profit of 23.8 million after tax. The company pays out DKK 6 million dividend to shareholders. Equity increased to DKK 214 million, which is 10% higher than market value. The result for 2007 is a six-fold increase on the result for 2006, when profit after tax was 4 million. Atlantic Airways' result before tax for Q was a loss of DKK 7.6 mill., compared to a loss of DKK 5.9 mill. for the same period last year. The company posted a loss after tax of DKK 6.2 mill.

6 For the first quarter of 2008 compared to a loss of DKK 4.8 mill. For the corresponding quarter last year. Atlantic Airways' result after tax was more than DKK 6 million in the second quarter of 2008 compared to DKK 17 million same period last year. The result for the first half of 2008 was DKK 246,000 compared to DKK 12.5 million in Total turnover for the first half of 2008 was DKK 250 million. The balance sheet as of 30 June 2008 was DKK 484 million, which is DKK 95 million higher than at the beginning of the year. Equity was DKK 211 million and the solvency ratio 44%. Market Making Atlantic Airways P/F and Eik Banki P/F signed a Market Making Agreement where Eik Banki P/F acts as market maker for shares issued by Atlantic Airways P/F. As a consequence of the new agreement with Eik Banki P/F, Atlantic Airways P/F terminated the existing Market Making Agreement between Atlantic Airways P/F and Kaupthing Bank hf. with an effective termination date 29 June However the market maker, Eik Banki P/F, on the 17/ chose to suspend the market making on NASDAQ OMX Iceland until secure trading and clearing conditions could be guaranteed. Scheduled Flights The company will in 2009 operate a full year service between Faroe Islands and Copenhagen, Billund and Reykjavik. The airline has also decided to continue its summer services in 2009 from Faroes to London, Aalborg and Stavanger and will also operate the route between Reykjavik and Narsarsuaq in cooperation with Air Iceland. However, the seasonal services between Stavanger and Stockholm and between London and Shetland have been put on hold due to higher operating costs. Charter Operations The company signed in January 2008 a contract with SAS regarding wet lease of three aircraft commencing end of March 2008 and expiring between end of March 2009 and end of May It has been a precondition for this contract that the parties have signed a secondment contract whereby Atlantic Airways leases pilots from SAS during the contract period. The company has also extended the lease of two aircraft to meet the current demand for wet lease and charter. The Fleet In January 2008, a contract was signed with Airbus to purchase one aircraft of the type A319, with an option to purchase a second A319 aircraft later. The aircraft is expected to enter service in In April 2008 the company took delivery of a new Agusta Westland 139 helicopter. One Avro RJ- 85 aircraft was sold and leased back in October The aircraft is leased back over a 5-year period. Business Overview In October, Vága Floghavn P/F (Vágar Airport) decided to enter into a two-year agreement with Atlantic Airways to operate duty-free sales at Vágar Airport from November The agreement encompasses the operation of sales in the arrival hall as well as in the departure hall. The agreement can be extended by one year.

7 Board of Directors Eyðfinnur Jacobsen replaced Erling í Liða as Deputy Chairman and as member of the board at the Annual General Meeting as of 3 april There have been no other changes in the Board of Directors. Major Shareholders The major shareholders as of 23 October 2008, holding more than 5 % of the equity of Atlantic Airways P/F are: Vinnumálaráðið/ Føroya Landsstýri (67.0%) Sp/f (5.6%) Own Shares The number of own shares is at present 11,111 shares. The nominal value is DKK 1,111,100. This is 1 % of the total share capital. On 18 June 2008, the company purchased 11,111 of own shares from the management at a price of DKK 240 pr share. The board agreed that this was a good deal for the company. Articles of Association Atlantic Airways P/F has published a Remuneration of policy for Board of Directors and Management dated : This is an amendment to the articles of association. The purpose of P/F Atlantic Airways remuneration policy is to ensure appropriate corporate governance in the company and fulfil the long-term value creation for the company s shareholders. Remuneration to individual Board members and members of Senior Management is detailed in the Annual Report and will also be published on the company s Investor Relations website Adoption of IFRS in 2009 Correction of date in the Registration Document page 60, year 2009 instead of Atlantic Airways will adopt IFRS for the first time in its financial statements for the year ending 31 December 2009, which will include comparative financial statements for the year ending 31 December 2008.

8 Table of Contents Resumé (Danish Translation of Summary)...2 Summary Information Purpose of Supplement Significant New Information...10 Result of the offering November Financial Overview...11 Market Making...13 Scheduled Flights...14 Charter Operations...14 The Fleet...15 Business Overview...15 Board of Directors...16 Major Shareholders...17 Own shares...17 Articles of association...17 Accounting Standards and Principles Documents on Display Definitions Persons Responsible...20

9 1. Information In accordance with EU legislation, Atlantic Airways P/F has chosen Iceland to be its Home Member State. This supplement has been prepared to collate new information, which has come into existence since the issuance of the prospectus of Atlantic Airways P/F dated 9 November 2007 and has to be read in conjunction with the prospectus of Atlantic Airways P/F dated 9 November The ticker symbol of the shares at the NASDAQ OMX Iceland stock exchange is FO-AIR, and Atlantic Airways P/F has applied for FO-AIR to be used on the NASDAQ OMX Copenhagen stock exchange as well. The shares ISIN code is FO It is expected that the shares of Atlantic Airways P/F will be listed on the NASDAQ OMX Copenhagen stock exchange in October or November It is expected that the costs associated with the listing will amount to maximum DKK This supplement shall be governed by Icelandic law. Any disputes arising out of the contents of this supplement, or in connection therewith, shall be settled exclusively by proceedings in the Reykjavik District Court. Investors are reminded that Atlantic Airways P/F operates in a market where risk taking is an integral part of business. Investment risk in companies operating under such circumstances is generally greater than in companies in a more stable environment. Certain statements in this supplement are forward-looking. Such forward-looking statements and information are based on the beliefs of Atlantic Airways P/F s management or assumptions based on information available to the company. When used in this document, the word expect and similar expressions, as they relate to the company or its management, are intended to identify forward-looking statements. Such forward-looking statements reflect the current views of the company or its management with respect to future events and are subject to certain risks, uncertainties and assumptions. The company can give no assurance as to the correctness or such forward-looking statements. Except as required by applicable law, the company does not intend, and does not assume any obligation, to update the forward-looking statements included in this supplement as at the date hereof. When the company s shares will be listed on the NASDAQ OMX Copenhagen stock exchange, the company will also be subject to Danish law regarding listed companies. 2. Purpose of Supplement The purpose of this supplement is to seek admission to list and trade all the shares in Atlantic Airways P/F on NASDAQ OMX Copenhagen A/S. It is expected that all the shares in Atlantic Airways P/F will be listed on NASDAQ OMX Copenhagen stock exchange in October or

10 November After this, the Atlantic Airways P/F shares will be listed on both NASDAQ OMX Iceland and NASDAQ OMX Copenhagen stock exchanges (dual listing). 3. Significant New Information The management and board of directors regard the following information as significant new information and accordingly have prepared and published this document. There have been no other significant changes and no other significant new matter has arisen since the publication of the prospectus dated 9 November RESULT OF THE OFFERING NOVEMBER 2007 This chapter is a supplement to Securities Note chapter page 26 in the prospectus dated 9 November In the period November 2007 all shares offered for sale in the first privatisation round of Atlantic Airways were sold. The final price fixed on basis of the bookbuilding process was DKK 261 per share corresponding to the maximum price in the offered price range. Prior to the subscription period 155,250 shares were allocated to investors willing to order minimum 20,000 shares in a bookbuilding process, 155,250 shares were allocated to investors ordering up to 20,000 shares and 31,050 shares were allocated to the employees of Atlantic Airways. Due to the fact that the demand from the larger investors was greater than the demand from the smaller investors the final allocation was as follows: 180,959 shares corresponding to DKK 47.2 million were allocated investors ordering minimum 20,000 shares 139,380 shares corresponding to DKK 36.4 million were allocated investors ordering up to 20,000 shares 21,211 shares corresponding to DKK 5.5 million were allocated the employees of Atlantic Airways Only orders from investors ordering minimum 20,000 shares were reduced in accordance with the rules described in the prospectus dated 9 November Investors ordering up to 20,000 shares and the employees of Atlantic Airways were allocated the shares they subscribed for. On basis of the bookbuilding process the Ministry of Trade and Industry in consultation with Kaupthing Bank fixed the final share price at DKK 261 per share corresponding to the maximum price in the offered price range. On basis of the fixed share price the total value of Atlantic Airways share capital was DKK 270 million. In the subscription period 1,370 investors were chosen to buy shares in the Faroese airline company. Even though the offering was not marketed outside Faroe Islands foreign investors were to be found both among the larger and smaller investors.

11 Total proceeds from the offering were DKK 89.1 million. Net proceeds deducted the costs related to the offering will go to the Faroese Treasury. This was announced FINANCIAL OVERVIEW This chapter is a supplement to Registration Document chapter , pages in the prospectus dated 9 November Annual Report 2007 Pre-tax profit was DKK 29 million, with profit of 23.8 million after tax. The company pays out DKK 6 million dividend to shareholders. Equity increased to DKK 214 million, which is 10% higher than market value was a good year in financial terms for Atlantic Airways. Profit after tax for the year was DKK 23.8 million, and pre-tax profit was 29 million. This is best result so far in the company's 20-year history. The result for 2007 is a six-fold increase on the result for 2006, when profit after tax was 4 million. Half the company's revenues derive from abroad, with the remaining half earned on the domestic market. The main reasons for the good result are to be found in strong operational performance, and also from growth in financial income. Load factors on scheduled flights increased significantly, the number of charter flight hours was stable, and the helicopter activity experienced robust growth. The company posted some non-recurring charges to the profit and loss account during the year - such as costs related to the privatisation and listing of the company. The weather hampered flight operations in 2007, particularly in the second half of the year. Costs associated with irregular flights increased to just under 14 million, which is twice as much as in Revenue increased from 519 million to 539 million. The board of directors proposes to pay a total of DKK 6 million in dividend. After payout of dividend equity increased from 196 million to 214 million, which is 10 % higher than the current market value of the company. Provided the current economic climate prevails, the company estimates the profit for 2008 to be in the range from 20 to 25 million. The volume of scheduled flight activity is expected to be on the same level as in 2007, while the number of charter flight hours is expected to increase significantly, but gross margins will be lower. The outlook for helicopter operations is fair. The company is facing increasing levels of cost, and cannot avoid to review prices on certain services. That said, the company will maintain strict control of its costs in order to ensure healthy operational performance, and in 2008 Atlantic Airways intends to improve on its result before financial items for the past year. The company does not expect significant financial income in The Board of Directors and the Management are pleased with the strong performance in The full Annual Report for 2007 and a presentation of the annual report can be seen on the company website and is also attached to the announcement.

12 This was announced Q1 08 Financial Report Atlantic Airways' result before tax was a loss of DKK 7.6 mill., compared to a loss of DKK 5.9 mill. for the same period last year. The loss was on the same level as expected, but in order to reach the budgeted result for the full year 2008, the company must, as other operators in the airline industry, introduce measures to deal with the severe increase in fuel prices. For the first time ever, Atlantic Airways as a listed company published its quarterly financial statement. The company posted a loss after tax of DKK 6.2 mill. for the first quarter of 2008 compared to a loss of DKK 4.8 mill. for the corresponding quarter last year. The first quarter of the year is generally a weak quarter in the airline industry due to a lower volume of traffic during the winter season. The result is on the same level as was expected despite the fact that fuel cost increased by 20% during first quarter, and financial income declined. Excluding market value adjustment of securities, core operations actually improved during the first quarter of 2008 by DKK 1.5 mill. compared to Equity was DKK 208 mill. at 31 March 2008 and the resulting equity ratio 52.6%. The number of passengers on scheduled flights so far this year and the number of sold tickets for the summer season, indicate that the budgeted figures for the full year are on track. The wet lease o behalf of SAS are also performing as expected. There is no indication of increased helicopter activity in the Faroe Islands later this year. Therefore the company is working on creating partnerships outside the Faroe Islands. The company intends to offset the impact of increased fuel costs with fuel surcharges and adjustments of the price and bonus system. If the current trend of increases continues, it may be necessary to further increase the fuel surcharges. The company has also undertaken some fuel efficiency measures to reduce fuel consumption and CO2 emissions. This was announced Half Year 2008 Financial Report Atlantic Airways' result after tax was more than DKK 6 million in the second quarter of 2008 compared to DKK 17 million same period last year. The result for the first half of 2008 was DKK 246,000 compared to DKK 12.5 million in High fuel prices, higher depreciation and fall in share prices have severely impacted the result for the first half of 2008 compared to the first half of 2007, which was exceptionally good. The fuel costs on scheduled services increased by DKK 11 million in the first half of 2008 compared to the first half of 2007, which put pressure on earnings. Market value adjustment on shares resulted in a DKK 5 million gain in the first half of 2007, but in the same period this year, the result was a loss of DKK 1.6 million.

13 In the autumn of 2007, the company added two aircraft and one helicopter, and this is reflected in the DKK 10 million increase in depreciation in the first half of 2008 compared to the same period last year. The number of passengers on scheduled services increased by 5,170 in the first half of 2008, from 92,201 in 2007 to 97,371 this year. The increase in passengers and higher average income per passenger ensured a growth in revenue from scheduled services, but the growth was unfortunately not sufficient to counter the dramatic increase in fuel costs. The company's production of flying hours increased by 22% in the first half of 2008 compared to the same period last year. Aircraft and helicopters were airborne for a total of 6,817 hours during the first half of 2008 compared to 5,572 hours the same period last year. Wet lease activity for other airlines, particularly SAS, is increasing, and this activity will remain stable for the second half of Total turnover for the first half of 2008 was DKK 250 million. The balance sheet as of 30 June 2008 was DKK 484 million, which is DKK 95 million higher than at the beginning of the year. Equity was DKK 211 million and the solvency ratio 44%. The company maintains its initial profit target for the year, but it must as any other airline - continually adjust its costs, in order to counter the effects of cost increases, particularly on fuel. This was announced Financial Calendar 2008 for Atlantic Airways P/F This chapter is a supplement to Registration Document chapter 11.1 page 33 in the prospectus dated 9 November February 2008 Annual report April 2008 Annual General Meeting 22 May 2008 Interim Statement Q August 2008 Interim Statement Q November 2008 Interim Statement Q This was announced MARKET MAKING This chapter is a supplement to Securities Note chapter 10.2 page 26 in the prospectus dated 9 November Atlantic Airways appoints new market making partner Atlantic Airways P/F and Eik Banki P/F signed a Market Making Agreement where Eik Banki P/F acts as market maker for shares issued by Atlantic Airways P/F.

14 As a consequence of the new agreement with Eik Banki P/F, Atlantic Airways P/F terminated the existing Market Making Agreement between Atlantic Airways P/F and Kaupthing Bank hf. with an effective termination date 29 June This was announced Suspension of Market Making on NASDAQ OMX Iceland Atlantic Airways was informed 17/10-08 by Eik Banki P/F, the market maker in Atlantic Airways shares on NASDAQ OMX Iceland, that they were unable to guarantee the security of trading and clearing of transactions of Atlantic Airways shares traded on NASDAQ OMX Iceland. Therefore, the market maker, Eik Banki P/F chose to suspend the market making on NASDAQ OMX Iceland until secure trading and clearing conditions could be guaranteed. This was announced SCHEDULED FLIGHTS This chapter is a supplement to Registration Document chapter pages in the prospectus dated 9 November Interim route schedule for summer 2009 The company will in 2009 operate a full year service between Faroe Islands and Copenhagen, Billund and Reykjavik which all will be serviced with a substantial number of frequencies during the summer season. The airline has also decided to continue its summer services in 2009 from Faroes to London, Aalborg and Stavanger and will also operate the route between Reykjavik and Narsarsuaq in cooperation with Air Iceland. However, the seasonal services between Stavanger and Stockholm and between London and Shetland have been put on hold due to higher operating costs. This was announced CHARTER OPERATIONS This chapter is a supplement to Registration Document chapter page 40 in the prospectus dated 9 November Contract with SAS The company signed in January 2008 a contract with SAS regarding wet lease of three aircraft commencing end of March 2008 and expiring between end of March 2009 and end of May It has been a precondition for this contract that the parties have signed a secondment contract whereby Atlantic Airways leases pilots from SAS during the contract period. The company has also extended the lease of two aircraft to meet the current demand for wet lease and charter. This contract secures a sustainable utilisation of Atlantic Airways charter capacity during 2008 and first half of 2009.

15 This was announced THE FLEET This chapter is a supplement to Registration Document chapter 12.1, page 46 and chapter 13, page 48 in the prospectus dated 9 November Contract with Airbus In January 2008, a contract was signed with Airbus to purchase one aircraft of the type A319, with an option to purchase a second A319 aircraft later. The aircraft is expected to enter service in This was announced Delivery of a new Agusta Westland 139 helicopter In April 2008 the company took delivery of a new Agusta Westland 139 helicopter. The helicopter is the most modern and popular medium size helicopter in the world and can carry up to 15 passengers depending on configuration. AW 139 is well suited for offshore and SAR services as well as domestic services in Faroe Islands. This was announced Sale and lease back of one Avro RJ-85 One Avro RJ-85 aircraft was sold and leased back in October The aircraft is leased back over a 5-year period. This sale and lease-back agreement is balancing the portfolio of aircrafts in ownership and aircrafts on lease and support the strategy to renew the fleet. The agreement will have a positive impact on cash flow and the financial result for This was announced BUSINESS OVERVIEW Duty-free shops at Vagar Airport This chapter is a supplement to Registration Document chapter 11.6 page 37 in the prospectus dated 9 November In October, Vága Floghavn P/F (Vágar Airport) decided to enter into a two-year agreement with Atlantic Airways to operate duty-free sales at Vágar Airport from November The agreement encompasses the operation of sales in the arrival hall as well as in the departure hall. The agreement can be extended by one year. Duty-free sales has been an integral part of Atlantic Airways service concept on the carriers flights to and from Faroe Islands for more than twenty years. Duty-free sales on shore at Vágar Airport has not been allowed until now. Transferring duty-free sales from the air to the ground helps the company to reduce CO2 emission pr. passenger. This was announced

16 BOARD OF DIRECTORS This chapter is a supplement to Registration Document chapter 15.3 page 51 in the prospectus dated 9 November 2007 The board of Directors is at present: Christian Andreasen, Formaður / Chairman Eyðfinnur Jacobsen, næstformaður / Vice chairman Petur J. Eiriksson Verna Rasmussen Ingi S. Joensen Replacements: Eyðfinnur Jacobsen replaced Erling í Liða as Deputy Chairman and as member of the board at the Annual General Meeting as of 3 april There have been no other changes in the Board of Directors. Eyðfinnur Jacobsen, Dánjalstrøð 1, FO-100 Tórshavn, Faroe Islands Lawyer at Advokatpartafelagið Faroe Law P/F, Tróndargøta 19, Tórshavn Vice-chairman of the Board of Atlantic Airways, elected to the board of directors in April 2008 Management or board duties in other companies: Manager and board member of Advokatfelagið Faroe Law P/F Manager of sp/f Chairman of the board of 18. Oktober 1997 P/F, Kemilux Industri P/F, Miðlavarpið P/F, Sosialurin sp/f, Board member of, Advokatpartafelagið Faroe Law Other management or Board duties in the last five years: Flogsamband F.F. P/F, Intrum Føroyar P/f, Húsið sp/f, KJ Kranaleiga sp/f, KJ Contractors sp/f Eyðfinnur Jacobsen has no potential conflicts of interest between his duties to the issuer and his private interest or other duties. Eyðfinnur Jacobsen is the Managing Director of the company sp/f which holds 5.6% of the shares in Atlantic Airways P/F as of the date of this supplement. The parent company of sp/f operates in the aircraft leasing and maintenance industry. Eyðfinnur Jacobsen and the rest of the Board and Management are aware of this situation and are taking appropriate precautions if necessary. Apart from this, no companies and partnerships of which Eyðfinnur Jacobsen is or has been member of the administrative, management or supervisory bodies or partner at any time in the previous five years, has any share or option holdings in Atlantic Airways P/F. Eyðfinnur Jacobsen has no family relationships to any of the other board members or the management.

17 Eyðfinnur Jacobsen has had no convictions in relation to fraudulent offences in the previous five years, and has not been senior manager, member of or associated with bankruptcy, receivership or liquidation in the previous five years. Eyðfinnur Jacobsen has not been subject of any officially public incrimination and/or sanctions by statutory or regulatory authorities or been disqualified by a court from acting as a member of the administrative, management or supervisory bodies of an issuer or from acting in the management or conduct of the affairs of any issuer in the previous five years. No service contract providing for benefits for Eyðfinnur Jacobsen has been made with the Issuer upon termination of employment. No amount has been set aside or accrued by the issuer to provide pension, retirement or similar benefits to Eyðfinnur Jacobsen. The Minutes of AGM were announced MAJOR SHAREHOLDERS This chapter is a supplement to Registration Document chapter 17 page 58 in the prospectus dated 9 November The major shareholders holding more than 5 % of the equity of Atlantic Airways P/F after the completion of the share offering November 2007 were: Vinnumálaráðið/ Føroya Landsstýri (67.0%) Sp/f (5.6%) As of the date of this supplement, these holdings have not been changed since then. This was announced and OWN SHARES This chapter is a supplement to Registration Document chapters 18, page 59 and 19.7 page 69 in the prospectus dated 9 November The number of own shares is at present 11,111 shares. The nominal value is DKK 1,111,100. This is 1 % of the total share capital. On 18 June 2008, the company purchased 11,111 of own shares from the management at a price of DKK 240 pr share. The board agreed that this was a good deal for the company. This was announced ARTICLES OF ASSOCIATION This chapter is a supplement to Registration Document chapter15.1 page 51 in the prospectus dated 9 November 2007 Amendments to the articles of association

18 Atlantic Airways P/F has published a Remuneration of policy for Board of Directors and Management dated : This is an amendment to the articles of association. The remuneration policy is shown in its full text below: The purpose of P/F Atlantic Airways remuneration policy is to ensure appropriate corporate governance in the company and fulfil the long-term value creation for the company s shareholders. Remuneration to individual Board members and members of Senior Management is detailed in the Annual Report and will also be published on the company s Investor Relations website. Board of Directors remuneration The Board of Directors of P/F Atlantic Airways is remunerated with a fixed fee. The remuneration is not included in any sort of incentive or performance related pay. The remuneration are fixed at a certain level, which reflects the competences and efforts of the Board members, the activity of the company, the scope of the work load and the number of Board meetings. The chairman of the Board of Directors receives double the basic remuneration and the vicechairman receives one and a half of the basic remuneration. Management s remuneration Senior Management is contractually employed. The remuneration is reviewed and evaluated regularly. All adjustments to existing management contracts should be made in writing and adopted by the Board of Directors. Decisive to the remuneration to Senior Management is the objective to ensure the company s continued possibilities to attract and maintain the best qualified members of Senior Management. The details in the total remuneration to the Senior Management are comprised in consideration of market practice and the company s specific needs. Remuneration of Senior Management may be comprised of fixed pay, value-based bonus, and pension. The total level for the non-variable elements in the remuneration is established in consideration of market level, as e.g. the company s size and course of development are taken under consideration. Members of Senior Management receive defined contribution plans. Variable remuneration to members of Senior Management is fixed specifically in consideration of their goal achievement herein. The Board of Directors decide within the frame-works of this policy all aspects of the remuneration to the Senior Managements, including severance terms. Liability This remuneration policy is adopted by the Board of Directors of P/F Atlantic Airways and recently adopted by the General Meeting in April 2008.

19 The Board of Directors is responsible for performing any necessary adjustments and resubmitting any changes to the General Meeting. This was announced dated ACCOUNTING STANDARDS AND PRINCIPLES This chapter is a correction to Registration Document chapter 19.1 page 60 in the prospectus dated 9 November Adoption of IFRS in 2009 In the Registration Document chapter 19.1 page 60, it was announced: "Atlantic Airways will adopt IFRS for the first time in its financial statements for the year ending 31 December 2008." The correct date is 31 December The correct wording is as follows: Atlantic Airways will adopt IFRS for the first time in its financial statements for the year ending 31 December 2009, which will include comparative financial statements for the year ending 31 December 2008." 4. Documents on Display In addition to those documents set out in Documents on Display on page 19 in the Registration Document dated 9 November 2007, the following documents will also be available for inspection on the company s address (Vága Floghavn, FO-380 Sørvágur, Faroe Islands) during normal business hours on Monday to Friday each week (public holidays excepted) for the life of the prospectus dated 9 November This document The announcements referred to in section 3 Significant new information Articles of Association as last changed 26 March 2008 Annual Financial Report 2007 dated 20 February 2008 Interim Financial Statements dated 22 May 2008 (Q1) and 21 August 2008 (H1) These documents can also be obtained electronically from the website 5. Definitions The principal definitions set out in the prospectus and the following additional definitions apply throughout this document unless the context requires otherwise. Prospectus the prospectus from Atlantic Airways P/F dated 9 November 2007 Supplement this document

20 6. Persons Responsible The management and board of directors of Atlantic Airways P/F, registered office at FO-380 Sørvágur, Faroe Islands (Faroese ID-No. 1223), hereby declare that having taken all reasonable care to ensure that such is the case, the information contained in this Supplement to the Prospectus of Atlantic Airways P/F dated 9 November 2007 is, to the best of their knowledge, in accordance with the facts and contains no omission likely to affect its import. Sørvágur 27 October 2008 On behalf of the management and board of directors of Atlantic Airways P/F: MAGNI ARGE MARIUS DAVIDSEN Chief Executive Officer Chief Financial Officer Borgartún 2 Í Fornanum 3 FO-160 Argir FO-380 Sørvágur Faroe Islands Faroe Islands CHRISTIAN F. ANDREASEN EYÐFINNUR JACOBSEN Chairman of the board Deputy Chairman of the board Rygsgøta 19 Dánjalstrøð 1 FO-160 Argir FO-100 Tórshavn Faroe Islands Faroe Islands PETUR J. EIRIKSSON VERNA RASMUSSEN Board member Board member Hæðarsel 22 Traðarbrekka 21 IS-109 Reykjavik FO-380 Sørvágur Iceland Faroe Islands INGI S. JOENSEN Board member Garðsgøta 9 FO-370 Miðvágur Faroe Islands