After weeks of uncertainty and despair, Prime Minister Katrín Jakobsdóttir announced some changes to Iceland’s travel restrictions that have been widely praised by Icelanders, especially those working in the travel industry. As reported, at some point after May 25th and no later than June 15th, anyone visiting the country will be given a choice: go into two-week quarantine, submit to a coronavirus test, or have a clean bill of health from your home country on hand. At the same time, popular social spots like swimming pools and pubs will be opening on May 25th, and the gathering ban ceiling has been lifted to 200 people.
While this will apply to visitors from within the Schengen Area—those from outside of Schengen will have to wait until at least June 15th—the announcement was still applauded by tourism industry leadership. But others have raised one important question: even if the country is opened wide, how are all these people supposed to get here?
The airline question
Icelandair comprises the lion’s share of flights to and from Iceland. Since last March, however, they have had to drastically cut back the destinations they fly from. They’ve laid off about 95% of their crew, and the remaining flight attendants are fighting for higher wages. The company is, in fact, on the brink of bankruptcy.
Some, such as Social Democrat MP Ágúst Ólafur Ágústsson, have offered the obvious solution: nationalise the airline, in whole or in part. Doing so would hardly be anomalous—Finland, Denmark, Sweden, Germany and France are amongst the European countries who, in whole or in part, hold ownership stakes of their largest airlines.
However, Minister of Finance Bjarni Benediktsson is decidedly against the idea. Speaking from the neoliberal view of economics that Bjarni champions, he has gone on the record stating that it would be better for Icelandair to find “market-based solutions” to their financial problems, even if it means the airline goes bankrupt.
New airline, or more airlines?
These remarks were well received by members of the opposition. Reform Party chair Þorgerður Katrín Gunnarsdóttir directly asked Bjarni in session, “How does the government plan to get involved to ensure this important connection between us Icelanders and the rest of the world?”
Bjarni replied that the government is prepared to offer conditional support if Icelandair can rescue itself, and failing that, perhaps a brand new airline could fill the void.
That is certainly an option, but it also raises the question of how expensive that would be compared to simply bailing out Icelandair. In addition, costs could perhaps be lowered, or economic incentives offered to international airlines to play a more active role at Keflavík International Airport.
Don’t forget the second wave
There is also another side to this idea of opening the country up again: the so-called second wave of infections from the coronavirus. Lilja Dögg Jónsdóttir, an economist and an advisor at the Prime Minister’s office, recently told reporters that if Iceland opens up and a new wave of infections arises that forces the country to clamp down again, this would be damaging to the reputation of the country on the international stage.
Lilja also correctly points out that there are a number of unanswered questions that remain. There has not, as yet, even been a plan established for how authorities would respond if a tourist in Iceland tests positive for COVID-19. Chief Epidemiologist Þórólfur Guðnason has said that it is unlikely such an individual would be deported, but rather than their travel insurance would pay for a hospital stay or quarantine. There are also questions as to for how long the government is going to pay for border testing, what markets are going to open up and when, and what level of demand even exists for the tourism industry to take advantage of.
No doubt, many of these questions will be answered in the days or weeks to come. There is little point in putting the cart before the horse—when we open Iceland again, everyone involved wants to be sure we are well prepared ahead of time, instead of playing the whole thing by ear. If we open too soon, on some hopes of rescuing the economy at the start of the tourism high season, all of our efforts could be undermined and set us back to square one.
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