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This is already outdated. Just now the cabin-crew union and Icelandair signed a new contract.

I couldn't find an article in english but in another article they say that all layoffs will be reversed.

https://www.visir.is/g/20201992741d/flugfreyjur-og-icelandai...

Same news, but from the the state radio:

https://www.ruv.is/frett/2020/07/19/samningur-flugfreyja-og-...

EDIT: And here is the news (in english from the state radio) about the controversial decision from the privately run Icelandair to lay of all its flight attendants because of the labor dispute:

https://www.ruv.is/frett/2020/07/17/icelandair-lays-off-all-...

What kind of deal did they get? Did they meet in the middle, or did the airline force them to sign a terrible deal?

Doesn't look like the one they were hoping for:

The bargaining committee of Flugfreyjufélag Íslands and Icelandair have signed a new wage agreement. The new agreement is expected to be valid until September 30, 2025. It is based on an agreement that was recently rejected in a vote.

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