Pilots warn Icelandair deal could enable social dumping

The Icelandic Association of Commercial Pilots has sharply criticised Icelandair’s purchase of a 49% stake in the company holding the former Play airline’s Maltese flight operating licence, mbl.is reports. The pilots’ association says the arrangement could move jobs out of Iceland and amount to social dumping.

The statement comes as a labour dispute between Icelandair and its pilots is being handled by the state conciliator.

The association says Icelandair management’s explanations for the purchase are contradictory and do not withstand scrutiny. It points to comments made by Icelandair CEO Bogi Nils Bogason in May that the deal would not lead to a reduction in staff in Iceland.

However, when asked after the transaction was completed on August 20 whether Icelandic crews would operate charter flights transferred to the Maltese licence, Bogason replied that this “remains to be seen”, according to the association.

“An unequivocal statement in May has thus become uncertainty in August, without counterparties, staff or the market being informed about what changed,” the statement says.

Icelandair paid 686,000 dollars, approximately 83 million Icelandic krónur, for the 49% stake and has the option to increase its ownership later.

The pilots’ association notes that the Maltese company owns no aircraft and that no aircraft is registered to its flight operating licence. It therefore believes the purchase is primarily about the licence itself.

FÍA also questions Icelandair’s claim that the Maltese licence could give it access to new markets. The association cites an analysis by the Icelandic Association of Aircraft Mechanics stating that Iceland has air transport agreements with 93 countries, compared with 88 for Malta. It also says Iceland is not at a disadvantage regarding double-taxation agreements.

FÍA therefore believes the purchase may instead concern greater flexibility in staffing. In that context, it says the most obvious meaning of “flexibility” is avoiding Icelandic collective agreements and regulatory oversight.

The association says the operating model could involve “social dumping, circumvention of collective agreements and the transfer of jobs out of the country”. It is calling on Icelandair to explain which jobs, aircraft and projects would be moved under the Maltese licence, what benefits it expects, and which markets the Maltese licence would open that Iceland’s licence does not.