Icelandic Travel Industry ‘Paralyzed’ until Christmas

From Keflavík International Airport.

From Keflavík International Airport. mbl.is/Árni Sæberg

Vala Hafstað

The COVID-19 pandemic is increasingly affecting the Icelandic travel industry. In recent days, 285 employees of four travel-related businesses have been laid off, Morgunblaðið reports, and the head of the Icelandic Travel Industry Association blames new restrictions at the border for paralyzing the industry.

On Friday last week, Isavia, the company that operates Keflavík International Airport, announced it would be laying off 133 people. In addition, 62 people, or 60 percent of the employees, who worked at Duty Free Iceland – a subsidiary of Isavia – were laid of yesterday. Since the start of the pandemic, the number of positions at Isavia is down by 40 percent.

Jóhannes Þór Skúlason, CEO of the Icelandic Travel Industry Association.

Jóhannes Þór Skúlason, CEO of the Icelandic Travel Industry Association. mbl.is/Kristinn Magnússon


All 68 employees of the Vestmannaeyjar ferry Herjólfur were laid off yesterday, and at Hótel Hamar, Borgarnes, West Iceland, more than 20 people were laid off the same day. Besides, all whale watching boats in Akureyri have ceased operation for the season. Three people, who normally work there full time during the winter, have lost their job.

Jóhannes Þór Skúlason, CEO of the Icelandic Travel Industry Association, who has been critical of the rules adopted August 19 that require testing all arriving passengers in Iceland twice for the coronavirus with a 4-5 day quarantine in between, tells Morgunblaðið that the travel industry in Iceland has been paralyzed until Christmas. Numerous people are unemployed and a number of travel-related companies are going out of business. “By now, it is clear what sort of effect it has when a whole industry faces such restrictions,” he states. “Businesses lay off people and are unable to rehire, due to the uncertainty in society.”

Recent layoffs hit especially hard in Reykjanesbær, located near Keflavík International Airport. A month ago, the municipality’s unemployment rate stood at 19 percent and has since gone up. There, unemployment is not limited to the travel industry, for 1,500 members of the VSFK, the Keflavík seamen’s union – or 35 percent of union members – are out of a job.

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