Icelandair’s Fate Won’t Be Decided Today

Vala Hafstað

An Icelandair shareholder meeting is scheduled today, although no agreement has yet been reached in wage negotiations between the airline and its flight attendants. On the meeting’s agenda is a proposal to grant the board authorization to increase the company’s share capital by issuing shares.

Gildi pension fund, which holds a 7.24 percent stake in the company, plans to vote in favor of a public stock offering, Morgunblaðið reports, quoting Davíð Rúdolfsson, head of the fund’s asset management.

Morgunblaðið reports that other shareholders will likely do the same. Most of them are Icelandic pension funds, except for the largest stakeholder – a US investment fund with a 12.5 percent stake in the company. Should the board not receive permission to hold a public stock offering, or should a public stock offering not succeed in sufficiently increasing the company’s share capital, then the airline could end up filing for bankruptcy.

The future of Icelandair won’t be decided today. The result of the vote at the meeting will only determine whether a public stock offering is approved. If approved, the company still needs to collect up to ISK 30 billion (USD 209 million; EUR 191 million) in share capital. The shareholders waive their pre-emptive rights to the new shares. 

A public stock offering could result in much of the shares going to the hands of new owners, since current shares are worth a total of roughly ISK 5.4 billion.

On Wednesday, flight attendants rejected the airline’s final offer which required a 20 percent increase in work load in exchange for a 12 percent pay raise for those with the lowest salary. The Icelandic Confederation of Labor has harshly criticized Icelandair for failing to entirely rule out the possibility of making a deal with another union (yet to be established) than the Iceland Cabin Crew Association to which all Icelandic flight attendants belong. No new meeting has been scheduled in the wage dispute.

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