Icelandic Air Traffic Controller Wage Talks Stall Amid Ongoing Dispute

Negotiations Reach Impasse

Talks aimed at resolving an ongoing wage dispute between the Confederation of Icelandic Enterprise (SA) and the Icelandic Air Traffic Controllers Association (ÍFF) have stalled. The latest negotiation session, held on October 30, 2025, concluded after three hours with insufficient progress, leading to an adjournment without a new meeting scheduled. Both negotiating committees have been tasked with assessing the current situation and considering their next steps.

Arnar Hjálmsson, Chairman of the Icelandic Air Traffic Controllers Association, stated that the approach followed over the past week had proven ineffective. The decision to pause the talks was made after consultation with the government mediator.

Core of the Dispute: Wages and Conditions

The central issue in the dispute revolves around wage demands, with air traffic controllers reportedly seeking a 25% pay increase. The ÍFF argues that their working conditions and pay lag behind comparable European standards. Conversely, business leaders, represented by SA, maintain that any pay increases must align with those of other professions.

The dispute has been ongoing, with controllers having been without a contract since the beginning of the year. The Confederation of Icelandic Enterprise (SA), which represents over 2,000 companies and 70% of salaried employees in Iceland, handles collective agreement negotiations on behalf of its members.

History of Industrial Action and Economic Impact

This latest stalemate follows a series of brief strikes and planned work stoppages that have characterized the negotiations. Air traffic controllers have previously called off strikes at short notice when progress seemed possible. However, earlier in October 2025, controllers staged overnight strikes that disrupted flights at Keflavík International Airport and Reykjavík Airport.

The potential for prolonged industrial action carries significant economic implications for Iceland. Sigríður Margrét Oddsdóttir, CEO of SA, has warned of serious economic consequences, estimating that a full day's halt in air traffic could cost the Icelandic economy approximately ISK 1.5 billion. The tourism sector, which accounts for over 8% of Iceland's economy, is particularly vulnerable to disruptions. Icelandair CEO Bogi Nils Bogason noted that a similar stoppage in 2023 cost the airline about ISK 700 million and caused widespread disruption for passengers, tourism operators, and exporters.

Uncertainty Ahead

With negotiations currently paused and no new meeting scheduled, the future of air traffic control services in Iceland remains uncertain. The dispute continues to be under the purview of a state mediator, who has been involved in previous attempts to bridge the gap between the two parties. The Icelandic Air Traffic Controllers Association plans to hold a meeting after the weekend to evaluate their position.