As negotiations with the Icelandic Cabin Crew Association (FFÍ) drag on without resolution, Icelandair has considering hiring cabin crew from outside the union, according to Fréttablaðið’s sources. The airline is aiming to reduce its salary expenses by 20% before a shareholders’ meeting on Friday where parties will vote on an ISK 29 billion ($200 million/€1.82 million) public stock offering. The Icelandic Cabin Crew Association rejected a contract offer the airline put forth on May 10.
Hiring from outside the union “must be one of the options that Icelandair has to consider, as the airline’s situation is very difficult,” stated Jón Karl Ólafsson, chairman of the board of TravelCo Nordic and a former Icelandair Group director. Jón Karl says that in most of Icelandair’s contracts with its staff, there is a clause that states that members of the relevant union have precedence when the airline is hiring. “It is, however, unlikely that this precedence clause applies if an employee chooses, for some reason, to be outside of the union.”
Shareholders insist on long-term contracts
Icelandair will meet with shareholders this Friday, where it will present its plan to raise funds through an ISK 29 billion ($200 million/€1.82 million) public stock offering. Most of the airline’s largest shareholders have stated they will not support the move unless long-term contracts have been signed with all the airline’s employees.
Icelandair recently signed new contracts with its pilots’ and mechanics’ unions, but negotiations with the Icelandic Cabin Crew Association have yet to reach a conclusion. According to the group’s chairperson Guðlaug Líney Jóhannsdóttir, the contract rejected by the union earlier this month entailed a five-year salary freeze, increased workload, and less vacation time.
Icelandair CEO denies speculations
In a letter to FFÍ, Icelandair CEO Bogi Nils Bogason stated the airline was not in negotiations with other unions regarding cabin crew positions. Bogi admitted there was pressure to bring negotiations to a close, but insisted that the airline has approached negotiations with integrity and “proposed an offer that would ensure Icelandair’s future competitiveness.”