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Keflavík airport Icelandair
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Icelandair Lays Off 82 Employees

Icelandair, one of Iceland’s major airlines, laid off 82 employees Wednesday due to weaker demand in travel to Iceland, Vb.is reports. Bogi Nils Bogason, Icelandair CEO, said that the layoffs will not affect Icelandair’s schedule. Staff in Iceland and in European offices were let go, but no flight crew members.

Volcanic impact

The company went through a growth face after the Covid-19 pandemic with new hires and new aircraft. “The growth has slowed down, so we had more space to focus on efficiency and optimisation, and that’s where our focus is right now,” Bogi said.

Icelandair is expecting its earnings to drop in 2024, in part due to the ongoing seismic and volcanic activity in the Reykjanes peninsula. “When the demand for flights to Iceland has dropped, Icelandair has used the flexibility of our route map to focus more on cross-Atlantic flights, but prices have gone down there,” Bogi said.

Bullish on the long-term outlook

He adds that Iceland has proven an expensive destination for tourists. “We’re trailing in our competition with Norway and Finland, for example, and this has been the development for the last few months,” he said. “A tourist’s expenses after they arrive in Iceland have been high enough so that Iceland has fallen behind.

Overall, however, Bogi was bullish on Icelandair’s financial position and the long-term outlook on tourism in Iceland.

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