Volcanic ash costing airlines £130m a day
Updated on 19 April 2010
Travel companies and airlines see stocks fall as experts warn that the costs incurred from the impact of the Icelandic ash cloud are "unsustainable".
The economic impact of the ash cloud that has grounded flights across Europe is likely to have greater financial consequence than the 9/11 attacks on the US, the European Union's transport commissioner warned today.
With the travel industry under financial strain for a fifth day, the Association of European Airlines had warned that some airlines would not survive if the crisis continued.
With airlines losing an estimated $200m a day, a prolonged suspension of services "will not be sustainable for some airlines", they said.
Flights have been grounded in the UK and across parts of Europe since last Thursday as a plume of ash from travelled south from Iceland after a volcanic eruption at Eyjafjallajokull.
As the crisis entered its fifth day, many companies saw stocks fall. British Airways shares fell as much as 6 per cent, although they recovered to stand 3 per cent lower.
The airline, which tonight announced it would aim to resume flights from London airports at 7pm tomorrow, said the results of a test flight yesterday showed it had suffered no damage from the volcanic ash.
A Boeing 747 had taken off with its chief executive Willie Walsh on board for almost three hours before landing in Cardiff. The flight conditions were "perfect" the airline said.
The move came as the UK's biggest airlines had continued to incur heavy costs due to the disruption.
BA, having just recovered from industrial action, said it ahd been losing around £15-20m a day. Budget airline Easyjet had also been losing up to £5m a day.
The airline industry group IATA had also criticised Europe's response to the disruption and demanded urgent steps to reopen airspace.
IATA boss Giovanni Bisignani said authorities in Europe had "missed opportunities to fly safely" while urging flexibility across European airspace.
"This volcano has crippled the aviation sector, firstly in Europe and is now having worldwide implications. The scale of the economic impact (on aviation) is now greater than 9/11 when US airspace was closed for three days," Bisignani said.
Holiday companies Thomson and First Choice had launched a repatriation programme to bring home 5,000 holidaymakers stuck in the Spanish resorts of Alicante and Malaga.
Holidaymakers in Alicante were being driven by coach to northern France where overnight accommodation was being offered before a ferry journey tomorrow.
Travel companies are also feeling the financial strain and are working on reassuring customers stranded abroad. With shares in tour operators also falling, there is a concern that consumer confidence could deteriorate as travellers think twice before booking flights and package holidays.
