Icelandair CEO Bogi Nils Bogason says that the airline will have to resort to “painful measures” at the end of April in order to respond to the devastating economic impact the COVID-19 pandemic has had on the company, RÚV reports. Bogi Nils has stated that further layoffs are “unavoidable” and will be announced as soon as next week.
“Today we’re operating about 5% of our flight schedule and we don’t know how long this situation will last, whether it will be three, six, or nine months,” Bogi Nils stated. “As such, we’re just preparing ourselves for this period of uncertainty and the enormous revenue shortfall that we’re going to have to address by lowering our costs in order to get through this and be in a stronger position when the demand resurges again.” He continued that the airline expects to operate a very sparse flight schedule over the summer months.
In light of the expected layoffs, Icelandair executives have met with shop stewards and union representatives. Bogi Nils emphasized that Icelandair hopes to rehire most of the employees that have been or will soon be laid off, but this may be a rather long time coming.
Icelandair laid off roughly 500 employees during the 2008 banking collapse, the most extensive mass layoff in the company’s history. Bogi Nils says that the airline is currently looking at layoffs on that scale, extending across all divisions of the company. “These are really painful measures,” he said. “As we have fantastic employees working for us, many with extensive work experience who have done a great job and worked for the company for a long time.”
Bogi Nils repeated, however, that the company fully intends to rehire staff when the market improves, and that Icelandair does not intend to sell off any part of its fleet at this time. “We are fully confident that the market will recover again and that Iceland as a destination has great potential in the future and that the airline hub in Keflavík, between North America and Europe, will have a lot of potential when this uncertainty ends. That’s our assessment. So we intend to use our fleet in the future, to get through this strong and seize our opportunities at the end of all this uncertainty.”