Niceair to Offer International Flights from Akureyri in June

Airplane from Niceair

A new Icelandic airline based in Akureyri is set to begin operations in June. Niceair will offer flights from Akureyri Airport to three destinations: the UK, Denmark, and Spain.

A growing market

Niceair – a new airline startup based in Akureyri, North Iceland – has announced that it will embark on its maiden voyage on June 2, Vísir reports. The news comes just over six months since Play Air’s inaugural flight

As noted in a press release authored by CEO Þorvaldur Lúðvík Sigurjónsson, Niceair was established in response to a growing local market in Northern Iceland – and following two years of negotiations between local and foreign parties.

The airline has secured possession of a 150-seater Airbus A319 aircraft, suited to passenger and cargo operations, and will initially operate under the air license of an unnamed European carrier. Niceair hopes to create approximately twenty jobs with a crew comprised of Icelandic and foreign staff. Wages will reflect the standards of the Icelandic labour market.

“The company’s goal is to secure scheduled flights year-round to foreign destinations from Akureyri Airport. That will simultaneously improve the quality of life for residents in the area, improve the access of foreign tourists to North Iceland, and last but not least, greatly improve the competitiveness of companies in the area,” the press release reads.

Public offering around the corner

Among Niceair shareholders are numerous companies from North Iceland, including KEA, Höldur, Kaldbakur, Norlandair, Armar, Akureyri Travel, Kaldi, and more. No single company owns over 8% of Niceair.

“In the coming weeks, the public at large and other companies will be offered the chance of investing in Niceair,” CEO Þorvaldur Lúðvík stated in the aforementioned press release.

The airline’s destinations will be formally introduced over the coming weeks and ticket sales will be offered on Niceair’s website.

Rio Tinto to Review Future of ISAL Smelter

ISAL aluminium smelter

According to a press release published this morning, Rio Tinto – one of the world’s largest metals and mining corporations – will conduct a strategic review of its ISAL smelter (situated just outside Hafnafjörður) to determine the operation’s “ongoing viability and explore options to improve its competitive position.”

500 Employees

Aluminium production at the ISAL (The Icelandic Aluminium Company) smelter began in 1969. The smelter currently employs roughly 500 people. Rio Tinto had previously reduced the smelter’s capacity to 85 per cent, owing to a lack of profitability.

In a press release this morning, Rio Tinto (which is the sole owner of ISAL) expects ISAL to remain, “unprofitable in the short to medium term in the challenging conditions facing the aluminium industry, due to the smelter’s uncompetitive energy costs and historically low aluminium prices.”

Rio Tinto will continue discussions with the Government of Iceland and the utility company Landsvirkjun (which provides power for the smelter) on how the smelter can return to profitability and become competitive in the global market. The corporation is considering all options in its strategic review (expected to be completed during the first half of 2020), “including curtailment and closure.”

The press release quotes Rio Tinto Aluminium chief executive Alf Barrios: “We have worked intensively to improve ISAL’s performance, however, it is currently unprofitable and cannot compete in the challenging market conditions due to its high power costs.”

Rio Tinto adds that it aims to work closely with stakeholders who have a shared interest in the smelter’s future, including the government, Landsvirkjun, employees, unions, and the local community.

Taken Aback by the News

In an interview earlier today, Reinhold Richter – principal union representative for ISAL employees – told Vísir that the news of the smelter’s possible closure had taken employees by surprise. The staff needs to “sleep on it,” Reinhold told Vísir.

A new wage agreement with ISAL has been drafted by the Confederation of Icelandic Enterprise (SA); however, SA and ISAL’s team of negotiators have not bee given permission to sign the agreement by Rio Tinto.

“Solemn News,” Says the Mayor

Vísir also spoke to Mayor of Hafnarfjörður Rósa Guðbjartsdóttir, who was apprehensive.

“[ISAL] is one of the largest employers in town. It has operated for decades and it means a lot to the entire community. It’s not only a large and pleasant place of work, but it has also had a synergistic effect on other companies in town.”