Icelandair Reaches Deal With Flight Attendants And Avoids Layoffs

At 02:00 Sunday Reykjavik time, Icelandair announced that it had signed a deal with the Icelandic Cabin Crew Association (FFÍ). The airline also stated that the most recent cabin crew layoffs would be withdrawn. The news comes just two days after the airline announced that it would be firing every single one of its flight attendants and replacing them with pilots.

Icelandair 767
Icelandair and the FFI have been in negotiation since contracts ended in January 2019. Photo: Getty Images

New agreement reached

It was a difficult end to the week for the Icelandair cabin crew after the airline announced on Friday that it would be terminating their jobs immediately. The announcement came after the Icelandic national airline, and the FFÍ had reached a stalemate after months of negotiations.

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Both parties were in talks to negotiate a new contract and had reached disagreement over pay and working hours. Due to a reduction in operations, the carrier had decided that pilots could take charge of onboard safety.

FFÍ members had rejected the first contract offer from the airline in early May, which involved a five-year salary freeze. The second contract offer was also rejected. Yesterday, the airline announced that both parties had finally reached an agreement. The last-minute negotiations took place following the airline’s plan to fire all cabin crew. In a statement seen by Simple Flying, the airline said,

The agreement is based on the same principles as the agreement which was agreed to between the parties on 25 June 2020 and thus meets the set objectives of increasing productivity and flexibility for the Company and at the same time ensures competitive compensation for cabin crew members.

The new agreement will allow the airline to reduce operating costs without cutting the pay of flight attendants.

However, the deal still needs to be approved in a vote by flight attendants, which will take place on July 27th. In light of the recent situation, it is expected that this new deal will pass the vote. The FFI is yet to comment on the latest developments.

Icelandair 757
The flight attendants voted 73:27 to reject the previous deal. Photo: Getty Images

Dramatic measures to survive

Iceland’s flag carrier has introduced several measures to help it to survive since the arrival of COVID-19. To remain competitive against low-cost carriers, the airline has reduced operating costs. The airline laid off over 2,000 employees in response to the coronavirus pandemic, as well as reducing working hours and introducing wage cuts for its remaining employees.

The company signed new five-year deals, similar to those proposed to cabin crew, with air mechanics and pilots. The airline’s board took a 30% salary reduction while the salary of the CEO was decreased by 25%.

Icelandair entered negotiation with the FFÍ in the hope of also reducing the cost of cabin crew, as the carrier fought to avoid bankruptcy.

Icelandair, Boeing 767, Heart Flight Path
Iceland reopened to international travel on June 15th. Photo: Getty Images

COVID-19 has resulted in crew reductions

A collapse in demand for flights in the face of the coronavirus pandemic has resulted in several airlines facing financial difficulty. Job cuts and wage reductions are a familiar story as airlines fight to survive amid the grounding of flights and the closure of borders.

While many airlines have reduced the number of staff on the payroll, some have negotiated pay cuts to save jobs. Just this month, Ryanair announced that its pilots would be taking a 20% pay cut as part of efforts to avoid 3,000 job cuts at Europes biggest budget airline.

Do you think the cabin crew will vote in favor of this new deal? Let us know in the comments.