Icelandic investor Skúli Mogensen, the CEO and largest shareholder of the Icelandic airline WOW Air argues lack of investment in infrastructure will cost the economy as much as a billion EUR in lost revenues over the coming years. The government has, for example, waited far too long to embark upon necessary expansion of Keflavík Airport.
Keflavík airport the greatest obstacle to economic growth
Skúli argues in an interview in local newspaper Morgunblaðið that it is clear Keflavík Airport cannot cope with the boom in tourism. Already in 2017 airlines flying in and out of Iceland will be forced to slow down their expansion as the airport will simply be unable to handle the growing traffic. He adds that the damage is already done: Iceland is unable to handle the projected growth in tourism over the coming years. Now the only thing the government can do is to minimize the damage.
Related: From the editor: Good connections, but bad government lagging behind
He argues the most serious challenge facing Icelandic tourism is not shortage of workers and certainly not a shortage of opportunities. The most serious challenge, according to him, is government incompetence and lack of infrastructure investment. Especially at Keflavík international airport.
Inexcusable behaviour
Skúli points out the government is using obsolete data in its planning, studies which made far too conservative projections about the growth in the number of foreign visitors, which in turn has slowed down necessary investments, he argues. This kind of behavior was understandable a few years back, but it is inexcusable today.
According to Skúli the tourism industry is facing a looming crisis, as it will hit a wall which will make further growth impossible. When Keflavík Airport no longer can handle the growing traffic airlines will have to start to contract.
Then we will have to wait until at least 2021 for a new airport. In the meantime the Icelandic economy will lose at least 100 billion, but probably closer to 200 billion ISK (790-1,600 million USD/700-1,400 million EUR). Skúli argues the government has to step in to ensure that work at expanding Keflavík Airport begins immediately.
Icelandic investor Skúli Mogensen, the CEO and largest shareholder of the Icelandic airline WOW Air argues lack of investment in infrastructure will cost the economy as much as a billion EUR in lost revenues over the coming years. The government has, for example, waited far too long to embark upon necessary expansion of Keflavík Airport.
Keflavík airport the greatest obstacle to economic growth
Skúli argues in an interview in local newspaper Morgunblaðið that it is clear Keflavík Airport cannot cope with the boom in tourism. Already in 2017 airlines flying in and out of Iceland will be forced to slow down their expansion as the airport will simply be unable to handle the growing traffic. He adds that the damage is already done: Iceland is unable to handle the projected growth in tourism over the coming years. Now the only thing the government can do is to minimize the damage.
Related: From the editor: Good connections, but bad government lagging behind
He argues the most serious challenge facing Icelandic tourism is not shortage of workers and certainly not a shortage of opportunities. The most serious challenge, according to him, is government incompetence and lack of infrastructure investment. Especially at Keflavík international airport.
Inexcusable behaviour
Skúli points out the government is using obsolete data in its planning, studies which made far too conservative projections about the growth in the number of foreign visitors, which in turn has slowed down necessary investments, he argues. This kind of behavior was understandable a few years back, but it is inexcusable today.
According to Skúli the tourism industry is facing a looming crisis, as it will hit a wall which will make further growth impossible. When Keflavík Airport no longer can handle the growing traffic airlines will have to start to contract.
Then we will have to wait until at least 2021 for a new airport. In the meantime the Icelandic economy will lose at least 100 billion, but probably closer to 200 billion ISK (790-1,600 million USD/700-1,400 million EUR). Skúli argues the government has to step in to ensure that work at expanding Keflavík Airport begins immediately.
