Icelandair has downgraded its EBITDA forecast from $140-$145 million to $138-$143 million for the year following May’s industrial action by its pilots.

The revised forecast assumes an average €/$ cross rate of 1.35 and average fuel price of $1,000 per ton for the remainder of the year. The direct effect of the pilots’ industrial action is estimated to be $3.5 million.

The flight deck crew, which staged a strike May 9, resulted in the cancellation of 26 flights.

Afterward, the Icelandic Parliament banned any further industrial action by pilots, who had planned to strike for nine days between May 9 and June 3. The strike would have affected 600 flights and 100,000 passengers. Icelandair pilots are represented by the Icelandic Airline Pilots Association. The two sides later signed a temporary agreement, which is valid until Sept. 30. The accord is designed to give breathing space to allow a longer-term agreement to be put in place.

Icelandair Group’s investor relations policy stipulates the company should publish an EBITDA forecast at the beginning of each year and update or confirm it when quarterly accounts are published. An updated forecast must be published as soon as it is apparent the forecast has changed by more than 10%. 

“Although this is not the case now, the company believes that it is necessary, under the circumstances, to publish an updated EBITDA forecast now that the results for May are ready,” Icelandair said in a Monday statement. “The updated forecast takes updated operational assumptions into account and the current booking status,” it said.

The new EBITDA forecast also takes into account higher salary costs and lower revenue than was anticipated for the remainder of the year. However, the company does not believe it will have to face any further costs due to industrial action this year.

Last week, mechanics staged a 24-hour strike, which was reportedly halted after parliament again threatened to take legislative action. The mechanics are the last group of the company’s workforce to agree new labor contracts. Cabin crew settled earlier this year.