Icelandair Group has secured approval from its flight attendants for a new collective agreement, thrashed out after a stand-off which involved the airline’s dismissing, and then reinstating, its cabin crew corps.
The agreement will remain valid until the end of September 2025 and rounds off the critical negotiations with personnel that are essential to the airline’s financing strategy.
Icelandair Group says the deal with cabin crew union FFI provides flexibility to develop its route network while also taking into account the requirements of employees.
It sealed the pact as it unveiled a first-half operating loss of $313 million, having suffered a $105 million impact in the second quarter.
First-half revenues of nearly $270 million were down by close to 60%.
“All our efforts now are aimed at getting the company through this period by using our flexibility to react quickly to changes in demand in the short term and, at the same time, strengthen the long-term competitiveness,” says chief executive Bogi Nils Bogason.
“It is crucial to have reached agreements with our cabin crew, pilot and aircraft maintenance unions and I am grateful for their important contribution in ensuring the future competitiveness of the company.”
Icelandair Group is preparing to issue new shares as part of its effort to improve its financial position.
Bogason says the company had to take “difficult but necessary” cost-cutting measures in the second quarter, but the union agreements will enable the company to present an “attractive investment opportunity”.
The company’s net loss for the first half reached $331 million, compared with a loss of $89 million at the six-month stage last year.
Icelandair Group’s equity stood at $118 million at the end of June, with an equity ratio of 11%, while cash and equivalents amounted to nearly $154 million.