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Businesses count cost of air chaos
Airlines face millions in losses as volcanic ash plume grounds European flights.
Last Modified: 17 Apr 2010 05:10 GMT
With no sign of air travel returning to normal, airlines are facing major loss of earnings [AFP]

Airlines are facing millions of dollars in losses and warning of possible jobs cuts as thousands of flights remain grounded by a broad plume of volcanic ash spreading across Europe.

The shutdown of a swathe of European airspace has stranded millions of travellers, halted air shipments of food and other produce, and caused widespread disprution to the normally finely tuned, just-in-time international courier business.

It also threatens to badly dent the earnings of airlines, many of them already struggling to recover from the global financial crisis.

On Friday the world's aviation governing body, the International Air Transport Association (Iata) said it believed the shutdown was costing the industry around $200m a day.

Meanwhile Scandinavian-based airline SAS said it would have to consider temporary lay-offs of staff if the travel shutdown continues into a second week.

Hardest-hit are European airlines, but the airspace shutdown has also forced the cancellation of flights from Asia, the Middle East, the US and Canada, and as far away as Australia and South America.

Aviation experts say the tiny particles of volcanic debris carried high in the atmosphere pose a potentially catastrophic threat to aircraft engines.

Meanwhile volcanologists have warned that the eruption could last for many more days or even months, threatening drawn out travel chaos and a deepening financial cost.

A previous eruption by the same volcano lasted a year.

Varied response

On Friday officials at the Association of European Airlines (AEA) criticised the varied response by national governments to the ash plume.

"No one questions that volcanic ash poses a threat to safety," said the association's secretary general Ulrich Schulte-Strathaus.

With flights grounded rail firms have seen a surge in sales  [AFP]

"But we are concerned that different criteria may be applied by different authorities to determine if and when their airspace will be closed, and equally importantly, re-opened for aircraft," he said.

"The damage that results to the Western European economy is huge, since the infrastructure that European airlines provide is vital."

The group said it believed Europe's economy had already lost around a billion euros due to the airspace shutdown.

"The Belgians simply shut up shop, and did so apparently long before their airspace was contaminated," David Henderson, a spokesman for the AEA, told the AFP news agency.

'Ultra-cautious'

"The Germans seem to be approaching it a bit more pragmatically," while the British appeared "ultra-cautious," Henderson said.

"Nowhere does anyone seem to have taken into account the density of the particles in the cloud, and at what point their concentration ceases to be critical."

But while the airline industry is bracing for a heavy financial hit from the shutdown, other businesses are reporting a sudden boom in trade.

Ferry and rail firms have seen a surge in ticket sales and in the UK one leading taxi firm has reported a spike in inquiries from customers wanting to book chauffeured cars for urgent travel across Europe.

Source:
Agencies
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