Icelandair withdraws mass cabin crew lay-off after new deal emerges

Icelandair Group has reversed an extraordinary decision to dismiss all its cabin crew, after a swift resumption of negotiations resulted in another tentative collective bargaining agreement.

The operator’s mass sacking of its flight attendants, which would have involved replacing them with pilots from 20 July, had initially spurred a strike threat from cabin crew union FFI.

But the clash appears to have spurred a rethink on both sides, because the airline says they managed to restart discussions and have quickly reached another provisional collective agreement.

Icelandair Group says this revised deal is “based on the same principles” as the previous one, whose rejection had prompted the airline to dismiss its entire cabin crew corps – all of whom are FFI members – and start seeking an alternative.

The new agreement, which would be valid until the end of September 2025, still needs to be ratified by the flight attendants. This vote is likely to conclude on 27 July.

Icelandair Group says the pact “meets the set objectives” of increased productivity and flexibility, while ensuring “competitive compensation” for cabin crew.

It had said the same for the rejected deal, and the company has not specifically detailed the new agreement or any changes from the previous one, simply stating: “The current agreement results in further reduction in operating cost without negatively affecting the employee terms of cabin crew members.”

But crucially, the airline says it will not resort to using pilots to take over from cabin crew and adds that the “most recent” cabin crew lay-offs will be “withdrawn”.

FFI has yet to respond publicly to the developments.

Cabin crew had held out against reaching a new collective agreement, after Icelandair sealed revised deals with its pilots and aircraft mechanics.

The airline had been seeking to relax duty-time clauses and secure flexibility to allow it to operate new routes to the western USA and southern Europe.

Agreements with its personnel representatives are an important part of a strategy to underpin Icelandair Group’s liquidity, which includes a new share offering.