Airlines Lost Over $1.7 Billion in Volcano Ash Chaos


volcano_europe-travelThe International Air Transport Association (IATA) estimates that airlines lost at least $1.7 billion in revenue through Tuesday due to the Icelandic volcano crisis. During the three day period of April 17-19, when disruptions were at their peak, airlines lost $400 million per day.As airlines are looking to rebound from an upswing in demand, this could deepen the IATA’s estimated $2.8 billion loss for 2010. “It is hitting hardest where the carriers are in the most difficult financial situation. Europe’s carriers were already expected to lose $2.2 billion this year — the largest in the industry,” said Giovanni Bisignani, IATA’s Director General and CEO.

In addition, the IATA chief asked that governments relax airport slot rules, lift restrictions on night flights, and address unfair passenger care regulations. Bisignani also asked that governments compensate airlines for the lost revenue, referencing 9/11 — following the September 11 attacks, the U.S. government provided $5 billion in compensation for airlines due to the heavy costs of grounding their fleets for three days.

“I am the first one to say that this industry does not want or need bailouts,” said Bisignani, “but this crisis is not the result of running our business badly.”

As the airspace has slowly began to reopen, many travelers fear that government is under pressure to reopen it. “Airspace was being closed based on theoretical models not on facts. Test flights by our members showed that the models were wrong. Our top priority is safety. Without compromising on safety, Europe needed to find a way to make decisions based on facts and risk assessment, not theories,” said Bisignani.

How dangerous is volcanic ash to flight? According to NASA, “Encounters with volcanic ash while in flight can result in engine failure from particulate ingestion and viewing obstruction of the cockpit widescreen from etching by the acidic aerosols. Volcanic Ash Advisory Centers were established to monitor the air space in areas prone to eruptions and to issue volcanic ash warnings.”

On June 24, 1982, a British Airways (flight 9) Boeing 747 flew into a cloud of ash from Mount Galunggung. All four engines flamed-out, but the aircraft was able to glide out of the ash cloud and restart its engines. The aircraft landed safely, but if the aircraft was not able to glide out of the ash cloud there could have been a different ending.

The decision to categorize airspace based on risk was a step in the right direction. Unfortunately, not all states are applying this uniformly. It is an embarrassing situation for Europe, which after decades of discussion, still does not have an effective Single European Sky. The chaos and economic losses of the last week are a clarion call to Europe’s political leaders that a Single European Sky is critical and urgent,” said Bisignani.

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  1. It serves them right! With all these illeagal new fee’s being tacked on everyday, they should be run out of business!