Icelandair strike fears trigger cancellations and refund requests

Talks are scheduled at the state mediator’s office on Friday in the labour dispute between aircraft mechanics and Icelandair, mbl.is reports. Tourism companies are already receiving cancellations and questions about refunds or postponing trips, according to Jóhannes Þór Skúlason, director of the Icelandic Travel Industry Association.

“We have heard from our members across the country that cancellations are already beginning to arrive, along with inquiries about whether stays can be cancelled and refunded or whether trips can possibly be postponed,” Jóhannes Þór told Morgunblaðið.

Some companies are offering customers the option of using accommodation at a later date. However, he said the issue was already being widely discussed in social media groups focused on travel to Iceland.

Travellers were struggling to understand the prospect of an indefinite strike, he said, because they did not know how long it might last. That uncertainty was making it more difficult for them to postpone or reorganise their trips.

Damage could take several forms

Jóhannes Þór said it was difficult to estimate the financial impact of the dispute. The damage could include refunds for services already paid for, lost revenue and reputational risks that could lead to future losses.

He said around 7,500 tourists arrive in Iceland each day on average in September. Based on established average figures for tourists’ consumption and spending in foreign currency entering the Icelandic economy, that amounts to about two billion Icelandic krónur per day.

If all visitors cancelled their trips, the damage would therefore amount to two billion krónur a day, he said. Icelandair carries a share of those passengers, and Jóhannes Þór estimated that Icelandair passengers account for between one billion and 1.5 billion krónur in export revenue each day.

He said a large-scale cancellation of trips would cause enormous damage not only to tourism but to society as a whole.

“It cannot be acceptable for small groups in the aviation sector to effectively close the country, with all the effects that entails for employment and the economy,” Jóhannes Þór said.

He acknowledged that the right to strike was important in modern society and that there was a strong tradition of exercising it. However, he said the effects of strikes by groups capable of closing the country’s largest gateway for days or weeks also had to be considered.