The Corona virus outbreak (COVID-19) has forced Icelandair to take major steps in order to cope with the decreasing demand for travel, as well as regulate cash flow. The company has decided, in a series of steps to cut costs, to lay off a total of 240 employees and reduce working hours for 92% of its employees.
In an additional attempt to restrict costs, the company has also issued 20% salary cuts for all fulltime employees, 25% pay cut for company executives and a 30% pay cut for the CEO and all board members. The airliner is also utilizing passenger baggage space to load cargo (20 tons of cargo aboard Boeing 767 planes), which might otherwise be left empty, due to fewer number of passengers. CEO of Icelandair Cargo Gunnar Már Sigurðsson stated:
“We manage to fit 10 tons of cargo on board Boeing 757 aircraft. This is an unusual situation.”
The company website has listed many changes to flight schedules and steps to facilitate travel for customers. “Our priority is to secure robust operations of Icelandair Group for the future. The measures we announced today are difficult but necessary to mitigate the impact of the situation on the Company’s operations and cash flow”, said Icelandair CEO Bogi Nils Bogason.
Flight operations, is not the company sector to take a hit by the prevailing conditions. The company has terminated operations (temporarily) for several of its hotels across the country, owing to the less number of incoming customers. The managing director, Magneu Þóreyjar mentioned “it has become pretty quiet in the hotels and therefore these measures have been taken”. Earlier an employee was also diagnosed with the Corona virus, in one of Icelandair’s hotel on Lake Mývatn.
Icelandair has suffered by the atmosphere created by the worldwide pandemic and the company says it is taking all necessary actions to prevent further losses. The airliner is also assessing supplier contracts in an effort to cut costs where possible.
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