Anonymous investors are preparing to invest in Iceland’s newest airline, Play, as Icelandair struggles to avoid bankruptcy, but an airline industry official has warned that Icelandair may prove irreplaceable.
Skuli Skúlason, chairman of the board at Play, told Mannlíf that several Icelandic investors are ready to back Play. The airline’s backers hope to capitalise on Icelandair’s current economic crisis. Should Icelandair declare bankruptcy, Skuli says Play would be ready to start passenger flights in its place.
Skuli acknowledged that the COVID-19 pandemic had raised serious questions about Play’s viability. The airline officially launched in November 2019, following the collapse of WOW Air. Play planned to start flying early this year, but is yet to run any commercial flights.
Mannlíf has previously reported that Skuli has invested heavily to keep the airline afloat in recent months. But despite the pandemic, Skuli remains optimistic, “Play is going up” he asserts – it’s just a question of when.
Bluebird Nordic has also declared that it is ready to run commercial flights if problems at Icelandair continues, Morgunblaðið reports. The Reykjavik-based cargo airline could temporarily ensure passenger flights continued, but would not seek to compete with Icelandair.
Jóhannes Þór Skúlason, CEO of the Icelandic Travel Industry Association, has stressed that Play and Bluebird Nordic could not automatically replace Icelandair. He believes that creating an airline as strong as Icelandair would take years.
He explains that Icelandair is the travel industry’s most important company – 60-70% of visitors to Iceland last year were transported by the airline.
Progress at Icelandair
In related news, Icelandair has struck a deal with the Association of Icelandic Pilots, Vísir reports. Jón Þór Þorvaldsson, chairman of the Association of Icelandic Commercial Aviators, described the new wage settlement as a “turning point agreement.”
Bogs Nils Bogason, Icelandair’s CEO, has also welcomed the agreement. “This is a big step to ensure the company’s competitiveness and a significant part of the company’s financial restructuring,” he explained in a statement.
Whilst this is positive news for Icelandair, the airline still has a long way to go before its economic difficulties are solved. For one, the company is yet to settle a dispute with flight attendants over proposed pay cuts.
High Demand For Flights
Demand for flights to Iceland remains relatively high despite the COVID-19 pandemic, Morgunblaðið reports. Icelandair’s latest market surveys reveal that 76% of participants are interested in flying to Iceland in the future. Particular interest was expressed by participants in Toronto, London, Paris and several regions of the United States.
The survey also showed that 86% of respondents trust Iceland’s handling of the coronavirus.
Birna Ósk Einarsdóttir, Director of Sales at Icelandair welcomes the survey results. She hopes that they are a sign that Icelandair and the tourism industry will soon bounce back.
Read about the latest proposals to ease travel restrictions here.
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