Icelandair has cancelled nearly 73% of flights that were scheduled so far this month, RÚV reports. The airline’s CEO says the cancellations are due to low demand caused by Iceland’s strict travel restrictions. Foreign airlines flying to and from Iceland have operated 95.6% of scheduled flights during the same period.
“We simply can’t fly flights where there are few passengers and very little demand and we can’t fly flights at an operational loss. That simply doesn’t add up in the long term and not in the short term either in the situation we are in now,” stated Bogi Nils Bogason, Icelandair’s CEO. Bogi added that he could not answer as to how other airlines were managing to continue their scheduled flights. The number of travellers arriving in Iceland has dropped significantly since August 19, when rules went into effect requiring all arriving passengers to undergo double COVID-19 testing and five-day quarantine.
Icelandair to Receive Line of Credit with State Guarantee
Like most airlines in the world, Icelandair has faced operational difficulties due to the COVID-19 pandemic. Last month, the Icelandic government decided to provide Icelandair a line of credit with a state guarantee. State-owned banks Íslandsbanki and Landsbankinn would finance the loan, which would amount to up to $120 million (about ISK 16.5 billion), and the state guarantee would apply to 90% of the amount loaned. Three parliamentary bills concerning the loan have been passed by Iceland’s parliament, but the initiative is subject to the two parties reaching an agreement on the terms, and the success of Icelandair’s planned refinancing initiative.
Customers Eligible for Refund and Damages
Most of Icelandair’s cancellations have been announced to travellers with short notice. Iceland’s Consumer Protection Agency (Neytendasamtök) has stated that customers whose flights were cancelled have a right to receive a refund and damages from the airline, and has encouraged those affected to seek out their rights.
