Icelandair Group is to cut
capacity and 190 jobs, as well as implement organisational changes and various
fuel saving measures in a bid to counter spiralling fuel prices.
Reykjavik-based firm is planning to reduce its winter capacity by 14% and cut
its number of full-time equivalent workers to 1,040 from 1,230 because of
soaring fuel prices and global economic uncertainty.
Icelandair CEO Birkir Holm Gudnason says: “These difficult external conditions
are affecting Icelandair’s
operations, so we are taking immediate action to strengthen the company and
place its business operations on a sound footing.
are working on the assumption that demand will fall as the year wears on, and
so we are planning on a reduction in the number of Icelandair flights next winter. The cutback in
flights will unavoidably call for staff reductions.
will do everything possible to minimise these cutbacks and make every effort to
defend the company’s income generation in order to secure its future growth.”
its new operating strategy, Icelandair
has dropped its plans to serve Toronto
year-round, although Toronto
services will be resumed in spring 2009.
flights will have a longer winter suspension, lasting from the end of October
until March, and frequencies on other services such as Paris
will be cut. Flights to New York,
however, will be stepped up. Icelandair
says: “These changes correspond to a cutback of 14% between winter schedules.”
the restructuring, taking account of part-time employees, the group is cutting
240 workers from its headcount including 64 pilots and 138 flight attendants.
Flight control and sales personnel will also be affected.
Icelandair says some of the cuts
will be made by leaving vacancies unfilled, but it adds that redundancies are “inevitable”.
It says just over 200 employees will receive notifications by the end of June
and adds that the headcount reduction is in addition to the group’s normal
Gudnason says: “Icelandair is engaged in harsh
competition and has based its success on the expertise and solidarity of its
staff. The result is that we are in the front rank of international airlines
and we enjoy a strong position here in Iceland.
In times of adversity this will be tested as never before.”
Icelandair has discontinued
or merged some of its departments, improved its working processes and trimmed
its middle management, cutting its directors from 15
to seven through non-replacement and redundancies.
on operating costs, the Icelandic firm is also pursuing various fuel efficiency
measures, such as lightening aircraft through precision loading, reducing
airspeed and using different landing procedures.
Gudnason says: “On the whole, we
are convinced that these measures will strengthen Icelandair for the future. We have shown before that
by reacting swiftly to external setbacks we strengthen our operations for the
Group comprises 12
subsidiaries, including domestic airline Flugfelag
and Travel Service in the Czech Republic,
but the firm says these have not been as sensitive to fuel price trends as Icelandair.
other group companies will also suffer cuts, such as Keflavik Airport
ground handler IGS where Icelandair
says the headcount will be reduced by around 75 positions in excess of normal