With a global cash crunch, airlines are seeking ways to reduce their costs as much as possible. Icelandair announced very significant job cuts and a restructuring of its organizational structure.

The flag carrier of Iceland indicated that around 2,000 employees would lose their jobs, with crew, maintenance and ground operations personnel affected the most by the job cuts, blamed on the uncertainty “for the foreseeable future.”

“To respond to the situation, Icelandair Group is taking extensive measures to get the Company through an extended period of minimum operations, including a considerable reduction in the number of employees and changes to its organizational structure,” stated the announcement.

Furthermore, the airline will introduce a new operational division, responsible for the development of its business and digital processes. The number of executives on the board will be reduced from nine to eight.

Prior to the coronacrisis, the airline was already struggling as the 737 MAX groundings impacted the airline’s operations significantly. Icelandair was forced to dismiss pilots in June 2019, and its financial situation looked shaky as it closed its 2019 results with a net loss of $29.9 million.

Despite making changes to its operations, including the rationalization of its route network and focusing mostly on the routes from Iceland.

The groundings affected the airline so much, that the all-Boeing Icelandair hinted in its strategy going forward the possibility of introducing Airbus aircraft into its fleet. Icelandair expected the Boeing 737 MAX to return to service after summer 2020, as it did not include the aircraft in its summer schedule.

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While the Boeing 737 MAX groundings had a very heavy impact on the relatively small Icelandair, it has another problem: it has an aging fleet. And introducing Airbus aircraft into its all-Boeing fleet would make a lot of sense.