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Photo: Photo by Páll Stefánsson.

Government Extends Contract With Icelandair

The Icelandic government has extended a deal with Icelandair to ensure continued flights to and from Iceland in the coming weeks, RÚV reports. The airline will operate an additional 22 flights from Keflavík to London, Stockholm, and Boston between May 6 and 16. Like most airlines in the world, Icelandair has seen operations drag to a near halt due to the COVID-19 pandemic.

Icelandair’s Chief Communications Officer Ásdís Ýr Pétursdóttir stated that the flights are part of a renewed contract with the government to ensure continued passenger flights to Iceland. Ásdís stated it is not clear what will happen when the government contract runs out on May 16.

Like most airlines, Icelandair experienced huge losses in the first quarter of this year. The airline laid off 2,000 employees last month in the biggest mass layoff in Iceland history. Icelandair hopes to raise up to USD 200 million (ISK 29 billion/€1.82 million) in equity through a public stock offering in June.

Iceland’s government has followed the airline’s situation closely but largely taken a hands-off approach to the company, which is privately owned and listed on the market.

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