MIAMI – After contract negotiations between Icelandic Cabin Crew Association (FFI) and Icelandair (FI) fell through, the airline has decided to permanently terminate all cabin crew in their network.
This decision comes after lengthy negotiations between the airline and FFI on conditions and time off for flight attendants fell through.
As of July 20, FI will temporarily employ its surplused pilots to assume responsibility for onboard service and safety. Due to COVID-19, onboard service will continue to be reduced significantly.
In a press release, Icelandair stated, “On 8 July, the members of the Icelandic Cabin Crew Association, rejected a new collective-bargaining agreement which had been agreed to and signed between the parties’ negotiation committees.”
The airline added, “Although the negotiations were continued after the results of the voting were announced, it has now become evident that a mutually agreed conclusion will not be reached.”
The rift between the two parties began In June last year when a collective-bargaining agreement was signed by FI and the FFI.
After that agreement was signed, the members of the FFI needed to vote in order to ratify the proposed agreement.
On July 8, members of the FFI voted against the agreement, which prompted FI to assess its options.
ICELANDAIR FINANCIAL RESTRUCTURING
Due to COVID-19’s impact on the aviation industry, FI has been working to restructure its company and assets.
In order to do so, the airline needs to come to agreements with its stakeholders and the Icelandic government. The various stakeholders include unions, Boeing, lenders, lessors, credit card acquirers, hedging counterparties and other vendors.
Once agreements have been reached between the airline and stakeholders, the airline plans on raising new capital through a share offering.
Agreements have already been reached with pilots and aircraft mechanics. Negotiations are ongoing with Boeing regarding future Boeing 737 MAX aircraft deliveries, lenders, lessors, credit card acquirers, hedging counterparties, and other vendors.
These pending agreements for the airline’s financial restructuring could be a clue as to the dismissal of cabin crew after negotiations fell through.