Iceland may be approaching the crest of coronavirus infections (or may have already reached by the time you read this), but we’re not out of the woods yet. As the country approaches the tourist high season, many are looking at the months to come with a blend of concern and cautious optimism, but no one knows for certain how the summer will play out.
If tourism is the lifeblood of the Icelandic economy, Icelandair would be the heart that keeps it circulating. No other airline brings as many people to and from Iceland as they do. So crucial to the Icelandic economy is Icelandair—and its hub, Keflavík International Airport—that when the Professional Pilots Union threatened to go on strike in 2014, then Minister of the Interior Hanna Birna Kristjánsdóttir introduced a law that made any kind of interrupting of the workplace at the airport—be it a strike, half-day strike, or sit-in—illegal.
As you can’t exactly pass a law forcing a virus to stop interrupting flights, the government has had to take other measures to triage the damage being done by the virus—and the political responses to it.
US President Donald Trump announced in March that EU nationals would be forbidden from entering the United States for at least 30 days. Barely a week later, EU officials introduced similar travel bans into the Schengen area, which includes Iceland, for non-EU nationals. This effectively put Iceland between two fronts: no one from outside Schengen was getting into the country, and no one from the EU was going to be traveling to one of Icelandair’s most popular destinations, the United States.
Icelandair was forced to cancel many flights as a result, issuing boarding pass vouchers and refunds in their wake, and their revenue began to dry up. On March 28th, the Icelandic government struck a limited deal with the airline to give them up to 100 million ISK in government-sponsored loans, but these were bound to repatriation flights—letting tourists leave, and bringing Icelanders home.
On April 15th, the director of Isavia—the company which operates Keflavík International Airport—Sveinbjörn Indriðason told Morgunblaðið that the company’s liquidity would completely dry up in five months if things don’t change soon. By way of comparison, last year some 84,000 passengers passed through Keflavík International Airport over Easter weekend; this year, the grand total was only 99.
The airline now faces great financial uncertainty, with Icelandair laying off about 95% of its workforce. The possibility of nationalisation gaining traction, both in the public discourse and in Parliament.
The tourism industry demands answers
Unsurprisingly, many business heads are predicting a recession is on the horizon, with economist Ásdís Kristjánsdóttir telling Fréttablaðið on April 6th that the tourism industry will likely be hardest hit.
Shortly after Minister of Justice Áslaug Árna Sigurbjörnsdóttir announced that Iceland would be participating in the EU’s travel ban extension, which is to last until May 15th, she said it was still impossible to say when flights to and from Iceland would return to normal. As she pointed out, while Iceland’s containment measures have resulted in instances of the virus declining, other countries may still have yet to experience peak cases.
Jóhannes Þór Skúlason, the managing director of the Icelandic Travel Association, told reporters that while he was pleased that some restrictions on public gatherings are being eased, the industry is more concerned with clear information on when they can expect tourism to open up again.
“There is a lot of uncertainty amongst us [in the tourism industry],” he said. “If many restrictions are put in place, then it’s pretty clear that the possibility is off the table of the industry getting any earnings in the height of summer.” He added that many companies may go bankrupt in the months to come, unless the government does something to help.
At the time of this writing, the government unveiled plans to do exactly that. A great many of those companies would be ones in the tourism industry, and while Icelandair has been grateful for any financial help they’ve gotten, it hasn’t done much to stave off the layoffs.
Summer festivals: sorry, Iceland’s queers
The summer is also a big festival season in Iceland, including Independence Day, the Merchant’s Holiday Weekend, and Reykjavík Pride. All of these festivals see thousands or even tens of thousands of Icelanders in attendance. How or even if these festivals will be held this year is now quite uncertain.
The City of Reykjavík is currently looking for ways to keep Independence Day festivities alive, despite it being right around the corner, on June 17th, and they also hope that August’s Culture Night can survive.
The hardest fight being fought, however, is for the Merchant’s Holiday Weekend. Held all over the country in the first weekend in August, the biggest version of the festival is in the Westman Islands. Iceland’s chief epidemiologist, Þórólfur Guðnason, recommended that no more than 2,000 people be permitted to gather for the festival this year, but organisers pushed back against the suggestion. Ultimately, organisers were given their own discretion in how to organise the festival, and they are determined to ensure that the show will go on.
Less certain is the state of Reykjavík Pride, which organisers predict will not be held this year, at least in the sense of a physical gathering of people. However, they are hoping that they can livestream the festivities and attract as many attendees of that event as in years previous, but the Pride parade—wherein Reykjavík’s queer community gathers in a show of solidarity and, well, pride—will be out of the question.
Summer of uncertainty
All this being the case, it bears mentioning that anything can change in the weeks and months to come.
It is all but certain that tourism this summer will definitely pale in comparison to previous years, but many if not most tourism industry companies may be able to weather the storm. Travel bans to and from the country may be lifted or extended, with Iceland opening itself to swaths of the world while remaining closed to others.
Life in Iceland unrelated to tourism, by contrast, is returning to normal much sooner than expected, and health officials’ containment measures have even attracted the attention and praise of the New England Journal of Medicine. The curve has been swiftly flattened, public institutions are opening again, and if health authorities continue their vigilance, the state of uncertainty hovering over the country’s most popular summer events may blow by and return to normal as the season approaches.
So while Iceland’s summer may be distinctly less tourist-oriented—which will certainly impact the economy which relies upon it—summertime for many Icelanders may indeed be as beloved a time as always, if somewhat quieter.
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