Six to seven hundred residents in the Reykjanesbær municipality in Southwestern Iceland could lose their jobs as a result of WOW air ceasing service, RÚV reports. Reykjanesbær includes the town of Keflavík, as well as Njarðvík and the village of Hafnir. WOW air officially ceased operations and cancelled all of its flights as of Thursday.
“This is a great blow to the Icelandic nation and especially Reykjanesbær,” remarked mayor Fríðjón Einarsson. “We’ve been meeting with the Directorate of Labour and the labour unions in recent weeks,” he noted, explaining that the municipality had hoped for the best, even as it prepared for the worst.
The job loss figure does not only account for former employees of WOW air itself but also individuals who worked for companies that were in some way involved with the airline’s operations. “We anticipate that between six and seven hundred people will feel the effects of this crisis. This is a mix of WOW air employees and employees of all those companies that were involved in that airline’s operations: ramp service employees, [employees] at restaurants, bus companies, and travel agencies. […] We’ll have a more exact figure in the coming days.”
Reykjanesbær has grown considerably as a result of the travel industry, specifically in connection with airlines, WOW air among them, and the airport in Keflavík. “Twenty years ago, 10,000 people lived [in the municipality], now there are 19,000,” Friðjón noted in a separate interview with RÚV. Interestingly, perhaps, 24% of those residents are of foreign origin.
The municipality’s projections of the trickle-down effect of WOW air’s closure has basis in recent employment situations at and around the airport. Last November, for instance, the company Airport Associates, which provides air terminal service at the Keflavík International Airport, laid off 156 of its 237 employees due to operational difficulties at WOW air. Then, in late January, when WOW air came to an agreement with investors regarding adjusted terms on the bonds that were bought at the airline’s auction, those jobs were reinstated. But they will likely be in danger again now.
Friðjón urged other airlines, particularly Icelandair, to hire WOW air employees who lost their job when the company went under. He said that he hoped former WOW employees would be given priority instead of companies bringing in new employees from abroad. “We’ve had good communication with those companies and got constant updates about the situation. But there’s maybe nothing that would have prepared us for a blow like this, unfortunately.”