Friday, June 21, 2024

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    SA and SAF support state guarantees to Icelandair

    The Confederation of Icelandic Employers and the Confederation of Icelandic Tourism do not want anything to be changed in a bill regarding a state guarantee for a loan of almost ISK 15 billion to Icelandair. Both organizations support the bill, despite the fact that they “have always been of the opinion that public intervention in the economy should not be too great”.

    This is stated in a joint review of the association two things to consider by state issuing guarantees to borrow in order to submit to credit risk is taxpayer support of the Icelandair.

    The commentary states that there are two sides to state support or “public intervention”.

    “On the one hand, the legal and tax environment must not be too burdensome for the business community so as not to reduce its competitiveness too much. On the other hand, to avoid applying the incentives for individual companies and industries, but to create a generally good operating environment. ”

    The direct impact of tourism is one of the greatest in Iceland
    In its statement, the organization briefly reviews the “unprecedented situation that the Icelandic economy is currently facing as we go through one of the greatest economic hardships in history. Globally, the epidemic has had the greatest impact on tourism and Iceland is no exception. The direct impact of tourism on the economy is one of the greatest in this country when looking at other western countries “.

    The comment states that Icelandair is the only Icelandic airline that operates scheduled flights with passengers to and from the country. The experience after the bankruptcy of WOW air shows that it can take a very long time to re-establish operations after the bankruptcy of an airline.

    “This is especially true for a time like this. Icelandair is in two respects a very systemically important company for Iceland. On the one hand as part of an important transport infrastructure for Icelanders to give them the opportunity to travel to and from the country. However, no more tourists move to the country. It is highly unlikely that foreign airlines would perform these roles in the same way in the absence of an Icelandic airline. It is likely that the number of destinations will decrease and the frequency of flights will decrease significantly. In addition, it creates more jobs for an airline to have its bases in this country. ”

    ID number navigation may not be part of the plan

    In the statement, SA and SAF say that tourism is one of the nation’s most important industries. Icelandair has played a key role in that industry from the beginning.

    “It can be assumed that the bankruptcy of [Icelandair] will result in a significant disruption of tourism operations. Although the company would be rebuilt in another form, it would probably be a lengthy process at a sensitive time for tourism when a quick response to changing circumstances will be paramount. Icelandair is therefore important not only for everyone who works in tourism but for the whole nation. ID number navigation can never be part of a strategy with such an important infrastructure. “

    The organization believes that the bill as it stands today ensures that the state will be in and out first.

    “That implementation of the support is therefore exemplary. In light of the above, the unprecedented circumstances that currently exist in the world, the systemic importance of Icelandair and the good implementation of the issue, the organization supports [the bill] and encourages it to be completed unchanged, “says the statement.”

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