Icelandair strike could cause rapid, severe damage, economist says

A potential strike by Icelandair flight mechanics could cause significant damage if it goes ahead, according to Gylfi Magnússon, a professor at the University of Iceland’s School of Business and a former minister of economic affairs and trade, mbl.is reports.

“It is obviously a very bad situation, and even the threat of a strike, before it happens, has a negative effect on bookings and tourism,” Gylfi told mbl.is. “If there really is a strike, it will cause significant damage to everyone. The immediate impact is on the airlines, but it also affects others in tourism and customers.”

He said few industries could cause as much damage as quickly as those capable of bringing tourism or air travel to a standstill.

Gylfi also said a settlement with the mechanics could fuel dissatisfaction among other groups. Wage negotiations were heavily influenced by workers’ relative position compared with other professions, he said, adding that large increases for one group could make agreements with other groups more difficult.

Finance and Economic Affairs Minister Daði Már Kristófersson said in Parliament on Monday that the government would take whatever measures were necessary in response to the strike.

According to Gylfi, the government could take various steps to limit the damage or help facilitate an agreement, including financial support or reductions in charges. The most dramatic measure would be a legal ban on the strike, he said.