Thursday, 13 August 2020

Icelandair getting more compensation from Boeing over 737 MAX grounding.

The Icelandair Group has now completed its negotiations with key creditors and suppliers, including Boeing over further compensation over the grounding of its 737 MAX aircraft.

While the details of the final settlement with Boeing are being kept under wraps, the airline confirmed on Wednesday that it has reduced its purchase commitment by four aircraft. It has also delayed the delivery for the remaining models until the second -quarter of next year and the start of 2022. The deal also provides additional compensation for Icelandair which covers a substantial portion of the damages incurred from the suspension and will mostly be realized by Q2 2021. 

Icelandair has also reached agreements on concessions with creditors which will see restructuring cash outflows to match expected cash inflows. The agreements are conditioned upon the completion of the upcoming share offering and Icelandair getting and agreeing on a government-guaranteed credit facility, which is in the final stages of negotiation.  

The airline has reached long term collective bargaining agreements with pilots, cabin crew and maintenance staff, however moral at the airline is said to be at an all-time low, with many staff being forced to look either for other full-time or part-time positions in order to supplement their incomes. 

With the new share offering about to be announced,  the true value of the Icelandic airline will be half of what it was during its recent peak in 2016. 

Recommended for you...

No comments: