Recent Flight European Cancellations Creating Significant Economic Implications
April 20, 2010 08:00 PM
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The closure of airspace over Britain, Northern Europe and Scandinavia is having economic repercussions around the world. It has halted the transport of goods, stranded hundreds of thousands of passengers and dealt a severe economic blow to the airline industry.
Nearly 100,000 flights were canceled or delayed as volcanic ash forced the closure of European airspace. The International Air Transport Association says the crisis has cost airlines more than $1.7 billion and is devastating an already beleaguered industry.
British Airways Chief Executive Willie Walsh says his company lost between $20 million and $30 million a day.
"My personal belief is that we could have safely continued operation for a period of time," said Walsh. "I think there were occasions when the decision to close airspace could have been justified."
Walsh says canceling everything was unnecessary and that after the unprecedented delays and cancelations there will still be complications with air travel.
"I think to get back to normal levels of operation, from an industry point of view, I think will take weeks," he noted.
About 20 percent of airline revenues comes from air freight.
Aramex logistics company managing director Jim Armour says the shutdown cost his company about a quarter of its daily revenue. The real problem is the uncertainty he says.
"If someone said this was going to last for two weeks like a strike, you could make your plans, you could think about what you do with your people. I think the concern is the unknown really," said Armour.
Armour says the implications are not just economic.
"[There are] terrible impacts. [For example,] you want to move blood plasma around and you need it badly, you want to move kidneys around? There [are] some disastrous consequences apart from the economic ones," he explained.
Flower growers in Kenya and Israel have had to destroy tons of roses and other flowers that are too wilted to have any economic value. Fruit and vegetable producers have also lost crops that could not travel to Europe. Jo Tanner, with Britain's Freight Transport association says there are lots of untold costs.
"The impact economically is really difficult to judge at this stage, because we do not know how much has been able to be salvaged, how much extra cost there has been in terms of the contingency planning, so moving stuff to particular hubs by air and then picking up the rest of the journey by road, rail or sea," said Tanner.
Airlines are asking European governments for financial and logistical compensation to help alleviate some of their losses. Many businesses will not have the same option and it may take some time before the full economic impact of the volcanic ash cloud is known.
The head of the International Civil Aviation Authority says the organization plans to convene a group of experts to draw up guidance for the industry in determining what concentration of volcanic ash would deem it unsafe to fly. Raymond Benjamin's comments come as European airports begin gradually resuming flights after a five-day shut down due to a huge cloud of volcanic ash making its way from Iceland across Europe. Benjamin said his organization, which is a…
British airspace was reopened Tuesday night. A British Airways flight from Vancouver, Canada touched down at London's Heathrow Airport for the first time in almost a week.Flights were allowed to take off throughout the day from Paris, Madrid, and Amsterdam.German officials have also said they will reopen airspace Wednesday. Some planes have been allowed to fly through Germany at low altitude.
The World Meteorological Organization says it appears the…
Just hours after European Union transportation ministers agreed on a plan to ease restrictions on airliner traffic, the British National Air Traffic Service reported that the eruption of the volcano in Iceland has strengthened.A statement released late Monday said a new ash cloud is heading toward Britain. It described the situation as unpredictable and changing.Earlier Monday, the EU ministers held a video conference and created three flight zones over…
Europe has re-opened most of its airspace, as airlines struggle to clear a massive backlog of passengers stranded since last week when volcanic ash brought air traffic on the continent to a standstill.Europe's air traffic control agency, Eurocontrol, says it expected to operate at least 28,000 flights Thursday. However, some disruptions continued - most of them briefly - in northern Europe as shifting winds sent a new wave of ash over parts of Norway, Sweden…