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Dozens of Europe-bound flights were canceled from Sydney to Tokyo and New Delhi, costing airlines millions of dollars in lost revenues and mounting hotel bills as distraught passengers braced for enforced stopovers of more than a week in Asia.
In Singapore, a major transit route for Europe-bound flights, 22 flights were canceled on early Saturday, Ivan Tan a spokesman for Changi Airport told Reuters, with more than 40 canceled since the disruption began.
"We don't know where to stay," said Dirk Kronewald, a German citizen. "Singapore hotels are full."
Singapore Airlines' said they were giving priority to elderly passengers and those with young children for hotel accommodation, but right now there were some shortages in Singapore hotels.
The airline was paying for two nights of hotel accommodation for affected passengers, for as much as S$300 per room a night, according to a pamphlet being distributed to passengers.
Mirjam, a Dutch national who was queuing at an airline counter with her husband Jules Vandamme and two dozen passengers, said the couple had to sleep at the airport late on Wednesday night before shifting to the nearby Crowne Hotel.
"One thousand people had to spend the night in the transit area" airline officials had told her, she said.
Northern and central Europe may remain closed to air traffic until April 22 as winds push ash from volcanic eruptions in Iceland across the continent, forecasters said.
European airlines canceled more than 77 percent of their flights yesterday as airports from Dublin to Moscow closed. No planes will operate out of the U.K. until at least 1 p.m. London time today, the National Air Traffic Service said. German airports will remain closed until 2 p.m. Berlin time, the DFS air traffic control agency said.
“Expect ongoing interruptions for the next four or five days,” Teitur Atlason, at the Icelandic meteorological office, said in a telephone interview yesterday. “The eruption is still in full swing, and the volcano is spewing pretty dark ashes as high into the air as 5 to 6 kilometers.”
Germany's aviation authorities have temporarily opened several airports for some flights. Most of Europe's airspace however, remains shut down throughout Sunday. Stranded travellers around the world faced a fourth day of chaos Sunday as Europe's volcanic ash continued to ground flights. German airspace was set to remain closed until 8 p.m. local time (1800 UTC). However, over the course of the afternoon, eastbound flights from Berlin, Hamburg, Hanover, Erfurt and Leipzig were permitted to temporarily operate. Frankfurt airport has also been opened for some northbound flight. European aviation agency Eurocontrol said civilian flights across the bulk of northern and central Europe were prevented from landing or taking off on Saturday and most of Sunday. More than three in four flights across the continent were halted as drifting volcanic ash continued to be spewed from its source in Iceland. But Dutch and German test flights carried out on Saturday without apparent damage seemed to offer hope that Europe's travel lockdown may ease in the coming days. Germany's Lufthansa said it had flown several planes to Frankfurt from Munich. "All airplanes have been inspected on arrival in Frankfurt but there was no damage to the cockpit windows or fuselage and no impact on the engines," a spokesman said. "We have not found anything unusual and no irregularities, which indicates the atmosphere is clean and safe to fly," a spokeswoman for KLM, which is part of Air France-KLM, said. Early on Sunday, Britain extended the closure of its airspace until 6 a.m. local time (0600 UTC) Monday morning. Flight bans had been imposed in Bulgaria, Romania and Ukraine as well as northern Italy and northern Serbia, Eurocontrol said. Buget airline Easyjet cancelled flights in northern Europe until at least the beginning of Monday, with rivals Ryanair imposing similar cancellations until at least Monday afternoon. Weather experts have warned that the volcanic ash cloud from Iceland was unlikely to move far until later in the week.
The volcano in southern Iceland's Eyjafjallajokull glacier sending ash into the air Bildunterschrift: Großansicht des Bildes mit der Bildunterschrift: Forecasters expected volcanic activity to continue. Southern Iceland's Eyjafjallajokull volcano began erupting for the second time in a month on Wednesday, sending a plume of ash 8.5km (5.3 miles) high into the air. Winds blowing the cloud from Iceland to Russia were expected to continue in the same direction, possibly until the middle of the week, according to some experts. "The ash will continue to be directed towards Britain and Scandinavia," Teitur Arason, a meteorologist at the Icelandic Meteorological Office, told the AFP news agency. "That's the general situation for the coming days - more or less for the next two days or maybe the next four or five days," he said. The airborn ash is a mixture of glass and sandy rock particles, which poses a significant danger to the working of jet engines. Experts tracking the volcano beneath Iceland's Eyjafjallajokull glacier said there were no signs of reduced activity on Friday. After a relatively minor eruption one month ago, the volcano erupted again on Wednesday, with these two incidents breaking almost 200 years of dormancy. That last recorded eruption continued, with differing levels of severity and activity, for almost 18 months between 1821 and 1823.
The Icelandic volcano eruption has already crippled European air travel, but the overall economic impact is only beginning to be understood. The lingering ash cloud could eventually cause holiday cancellations, delay deliveries across the continent and reduce demand for jet fuel. Businesses from around the globe that rely on air transportation of goods to and from Europe could feel the strain if the volcano continues its relentless assault.
Economists said they have not changed predictions for European growth, and are hoping that normal business could resume this week. But in a worst-case scenario in which the ash cloud closes air travel for months, one expert estimates lost revenue from air travel alone could knock 1 - 2 percentage points off regional growth as long as the event lasts.
The drop would mean that most “European countries wouldn’t get any growth this year,” said Vanessa Rossi, senior economic fellow at Chatham House. If that happens, it would literally stifle the global economic recovery. Compounding the problem is the fact that it is very difficult to predict what will actually happen with the volcano. Even geologists can’t tell us what is going to happen, Rossi said.
The questions on the minds of economists now are how long the volcano will continue erupting and spewing ash into the air, where the ash gets carried by the jet stream, and how long the ash will remain in the atmosphere over Europe.
According to vulcanologists and meteorologists, there are no current answers to any of those questions, as volcanoes are quite unpredictable. They are warning, though, that when the last Icelandic volcano erupted, it lasted more than a year.
Europe accounts for a third of the entire global gross domestic product, which is estimated at roughly $3 trillion. Most European travel occurs in the summer months, so most economists feel all would not be lost. However, Rossi estimates that a long shutdown could cost up to $10 billion weekly in the travel industry. Transportation analysts estimate that the impact will be greater, as almost 40 percent of Europe’s shipping is done by air.
The volcanic ash hanging over Europe has mushroomed into a dark 1.5 billion dollar cloud with no hope of a silver lining, analysts warned. Airlines and other travel industry sectors already face a huge bill from the four-day closure of European airspace and there will be growing pressure for the European Union to give financial aid, analysts said.
And the longer the disruption goes on the bigger the threat to the European economies struggling to come out of recession, they added. European carriers such as KLM, Lufthansa and Air Berlin are stepping up pressure to get passenger carrying jets back in the air. They have questioned experts who state the mineral dust blown over Europe from an Icelandic volcano is a threat to jet engines.
While the European Union is investigating the extent of losses, Brussels Airlines has already called for government help to survive. Many of their counterparts are also in a desperate state.
"After the banks, we will now be expected to help the airlines," one European Union official told AFP, speaking on condition of anonymity.
Air Canada and other airlines cancelled flights out of Newfoundland scheduled for Monday morning as a precautionary measure amid concerns ash clouds from last week’s volcano eruption were heading toward the province.
St. John’s, Gander, and Deer Lake were affected by an advisory said Angela Mah of Air Canada. Flights departing St. John’s until 9 a.m. local time were cancelled and the airline will see whether additional measures are necessary in the morning. “We’ll have a better picture tomorrow morning,” she said Sunday.
The cancellations mean several musicians and industry executives gathered for Sunday evening’s Juno awards could now be indefinitely stranded on the Rock. Most artists taking part in the awards had arrived in St. John’s Sunday, after thick fog had caused massive flight delays over the weekend.
Transport Canada said it was working with Environment Canada and NAV Canada to monitor weather patterns and said it would update
The concept that everybody’s been told is to sit and wait,” said the 25-year-old. “It could be a few days, it could be a few weeks before we can get out.”
With files from Reuters, Montreal Gazette, Calgary Herald, Edmonton Journal and Ottawa Citizen
As Europe struggles to reopen airports shuttered by a vast cloud of volcanic ash, European economists and politicians are beginning to assess its impact on the economy.
European Commission chief Jose Manuel Barroso has ordered a comprehensive study on the impact of the volcanic ash cloud on the region's economy, but some of the fallout is easily apparent.
The full or partial closure of air spaces in about 30 European countries during the past few days has created havoc for the airline and tourism industries. Airline companies say they are losing about $270 million a day.
Chief economist Simon Tilford, of the London-based Center for European Reform, says insurance and air freight companies, along with delivery companies like United Parcel Service are also taking a hit.
CLOUD REMAINS, EUROPE STILL SHUTDOWN
If the cloud remains over Europe for a sustained period of time, weeks or longer, the trade and travel sector would take a serious hit. Other industries, from high-tech manufacturing to supermarkets, forests and event organisers would also suffer.
-- This would be particularly devastating for airlines, possibly driving some of the weakest operators to bankruptcy.
-- Overall European growth might be affected, slowing recovery from the recession. Governments, already heavily indebted due to the financial crisis, would struggle to find the funds for support programmes. Europe might lag further behind the rest of the world in the global recovery. One economist estimated it might take 1-2 percent off European growth.
-- A prolonged shutdown would slow European and International Monetary Fund reaction to the Greek debt crisis, with the postponement of a meeting on Monday pushing Greek bond yields sharply higher. Further delays could pressure the euro EUR= and push Greek debt yields and spreads higher still.
The world's largest fish farmer, Norway's Marine Harvest (MHG.OL), said it would reduce salmon harvest volumes from Monday and that salmon exports to Asia and North America had been hit. Iceland's trade council said some fresh fish supplies were being fed into frozen fish supplies but most of Iceland's fish exports are sea-based and so unaffected. [ID:nLDE63I0FX]
Peter Grundhoefer, a top fruit and vegetables wholesaler in Frankfurt, said: "This affects all of us in the fruits business. We will lack beans and chillies from Egypt and fresh herbs from Israel ... (and) exotic fruits like mango, kumquats and physalis once stocks have been used up in the next one or two days."
Thomas Kosmidis, a manager at Frankfurt fish and delicacy restaurant supplier Venos, said: "We are running short of tuna from the Indian Ocean, Victoria perch from Africa, basil from Cyprus and other fresh herbs from Israel, lobster from Canada and green asparagus from California."
Germany's Deutsche See, which says it is the country's biggest seller of fish and seafood, said there was no bottleneck in fish supplies.
"Fish comes to Bremerhaven mostly by ship and truck and is then transported to our 23 Deutsche See sites within Germany by truck. Only small amounts of mostly exotic fish and seafood is imported by plane." Barbara Hennings, who works at Frankfurt sushi restaurant Iroha, said exotic vegetables were a bigger problem than fish.
"So far we're not experiencing any supply bottlenecks and we're not having to take dishes off the menu." She said tuna supplies came frozen once a month from Spain so there was no impact there. "But we import several vegetables from Japan, such as shiitake mushrooms, and we also get our yellowfish from Japan. Here we have some problems...but the majority of our fish we get from within Europe via road."
Kenya's horticulture industry is losing $3 million a day and it will take several weeks to recover even if flights resume now, its association of exporters said.
Below is a list of what he anticipates will be lost at each airline on a daily basis:
• Delta (DAL) - $10.4 million loss in revenue with an operating loss of $6.5 million.
• United (UAUA) - $8.4 million loss in revenue with an operating loss of $5.2 million.
• American (AMR) - $7.6 million loss in revenue with an operating loss of $4.6 million.
• Continental (CAL) - $5.6 million loss in revenue with an operating loss of $3.4 million.
• US Airways (LCC) - $3.7 million loss in revenue with an operating loss of $2.2 million.
MADRID, April 19 (Reuters) - British airports operator BAA expects airport closures due to volcanic ash to wipe a daily 5 million sterling ($8.02 million) off cash flow, but says the crisis will not have a material impact on financing abilities.
BAA, which is majority owned by Spain's Ferrovial (FER1.MC), closed all of its airports last Thursday after a volcano in Iceland started hurling ash into the atmosphere, imposing serious flight restrictions.
"BAA entered this period of flight suspensions with sufficient available funds to mitigate the closure of British air space for a considerable amount of time," the company said in a statement published in Spain.
Canada's air travel industry is being buffeted by a volcanic eruption in far away Iceland, with up to $4-million being lost daily due to flights grounded by the potential threat of airborne ash clouds in one of the world's busiest flight corridors.
Airline analyst Robert Kokonis has calculated that Air Canada AC.B-T could be losing about $3-million per day and tour operator Air Transat TRZ.B-T close to $750,000.
“This is totally unprecedented in the history of the airline business,” Mr. Kokonis said Monday, as the international airline industry criticized European governments for foot-dragging on discussions to reopen European air space.
A full-fledged shutdown has reportedly cost the industry $1-billion and stranded some 750,000 passengers.
As airline losses from the volcanic ash cloud spiraled over $1 billion on Monday, the industry demanded EU compensation and criticized European governments for relying too much on scientific theory - not fact - in their decisions to shut down airspace across the continent.
Shares of some European airlines fell as flight disruptions from the volcanic cloud moved into a fifth day, and the International Air Transport Association complained of "no leadership" from government leaders - one of whom admitted to EU dissension about how to respond.
"It's embarrassing, and a European mess," IATA CEO Giovanni Bisignani told The Associated Press. "It took five days to organize a conference call with the ministers of transport and we are losing $200 million per day (and) 750,000 passengers are stranded all over. Does it make sense?"
...The real sufferers may be countless smaller enterprises deprived of staff, regular customers or the vital nuts and bolts they need for their products.
The ash cloud is "impairing economic activity on a significant scale," warned German Economy Minister Rainer Bruederle, citing hampered exports in sectors from chemicals to automobiles. BMW AG, for example, flies components and transmissions from Germany to its plant in Spartanburg, South Carolina, where it builds the X5 and X6 SUVs. Travel operator TUI Travel PLC said it has lost at least 20 million pounds ($31 million), and shares in Swiss-based tourism specialist Kuoni fell 7 percent.
At Geneva's airport, shops were deserted and unsold newspapers piled up around a bookshop. "Yesterday we made 1,000 Swiss francs. Normally we take 15,000 francs a day," said Mariejo Cardoso, the shop's manager.
Social safety nets may help in most European countries, but some 5,000 workers have been temporarily laid off in Kenya following $12 million in losses in flowers and produce. For people selling products from Kenyan roses to Ghanian pineapples, European markets are a key to survival.
Meanwhile, Swiss supermarket Migros warned of diminishing supplies of green asparagus during the beloved vegetable's peak season amid halted air deliveries from the United States. Cod from Iceland and fresh tuna filets from Vietnam and the Philippines could also run out, it warned. Italian farmers' lobby Coldiretti said each workday without flights costs euro10 million (about $14 million) as mozzarella and fresh fruits risk going bad.
"There are knock-on effects all the way down the food chain," said Kate Gibbs, spokeswoman for the Road Haulage Association in Britain. "We are going to see shortages of fresh food stuffs in our supermarkets and those that do get through will be more expensive."
...Rental car agencies charged more. In Barcelona, Marta Hurtado said one agency was demanding euro1,400 (US$1,880) before mileage charges for a one-day drive to Switzerland.
Brett Barnett, an American resident in Geneva, was stuck in Copenhagen with dozens of colleagues but found a Swiss rental car that a similarly desperate traveler left in the Danish capital.
"Even though we're taking the car back for them, the company is charging us the one-way fee," Barnett said by telephone from the road. "But it's better than being stuck on an overflowing train. And there are hitchhikers all over the highways with signs saying 'Going to Germany? Going to France?'"
While travelers managed as best they could within Europe, those waiting for long-haul connections had less options. Rising hotel prices weren't making it easier.
"Yesterday, we had a hotel room at 250 euros. At midday, it was 460 euros, and in the evening, the price was 800 euros for a room -- we can't pay that," said Busi Daniel, a 39-year-old French tourist, as he waited at Hong Kong's airport.
Daniel planned on sleeping in the airport Monday.
The strategy of keeping inventories lean paid off for U.S. manufacturers during the recession. Just-in-time delivery of parts makes even more sense when budgets are tight.
Now that a giant ash cloud from a volcano in Iceland is disrupting global air freight, some manufacturers are finding that this strategy is backfiring. Nissan suspended production at two Japanese auto assembly plants Tuesday and BMW was forced to idle three plants in Germany because of shortages of critical parts. Computer maker Dell is experiencing delays in getting notebook computers to European customers.
These kinds of production delays could lead to higher prices for a number of everyday items -- from cell phones to seat covers, experts say. And some say the disruption from the volcanic ash cloud will lead companies to make changes in the way they do business.
Bill Carreira, CEO of Carreira Consulting LLC, who works with companies to develop and implement lean inventory plans, expects some manufacturers will revert to less-efficient methods. He thinks that would be an overreaction to a once in a lifetime event.
April 21 (Bloomberg) -- For a generation or more, no one ever gave a second thought to Iceland. Now it has shaken up the world twice in a couple of years.
First its banks collapsed in the most dramatic illustration of the fragility of our financial system. Now an Icelandic volcano is spewing ash into the sky, prompting a shutdown of European airspace. The continent is paralyzed. Planes are grounded. Travelers are stuck thousands of miles from their families and workplaces. Business is grinding to a halt.
Both happenings are strangely similar. They are, to borrow a phrase from financial theory, “black swan” events: unexpected developments, coming out of nowhere, for which no one has any kind of contingency plan. And they are a warning about the fragility of the modern economy.
In reality, “black swans” are everywhere. Much of Europe’s energy is now supplied by Russia. Is that really stable in the long term? Much of our food is now genetically modified. What would happen if we suddenly discovered it wasn’t safe anymore? The euro is a relatively new currency. It has struggled to cope with a few deficit issues in Greece, one of the smallest member states. There must be half a dozen different kinds of crises that could mean the money most of the continent relies on doesn’t work anymore.
All sorts of unexpected events are lurking in the shadows. By definition, we haven’t thought about them. It is because they are so unexpected that they are so dangerous. What we can do is think harder about the threats, get better at forecasting them, and find ways of making ourselves less vulnerable.
Air travel is useful. It is the quickest and usually the cheapest way of getting around. But we shouldn’t depend on it as much as we do. We shouldn’t rely so completely on any single network, whether it is financial or technological. That should be obvious to everyone. But sometimes it takes something as powerful as a volcanic eruption to make a simple point.
But Americans who have been stuck in vacation spots and missed several days of work through no fault of their own can't count on the volcano defense to keep their jobs safe. The at-will employment doctrine that governs most private-sector jobs in the United States does not offer much protection in the face of a natural disaster. "Unfortunately there's no volcano exception to the at-will employment doctrine," says employment lawyer Patricia Barasch of Schall & Barasch in Moorestown, N.J. Barasch, who serves as first vice president of the American Employment Law Association, says that the volcano disruption highlights what's wrong with the law, as at-will employees can be fired for a good reason or a lousy one--such as missing work because they're stuck overseas thanks to the travel halting ash from an erupting Icelandic volcano. "This is a very compelling circumstance," Barasch says. "You would hope that an employer would do the right thing."
West Lafayette, Ind. (PRWEB) April 21, 2010 -- The shutdown of European airways due to ash from a volcanic eruption in Iceland will have global economic impact beyond airlines, but getting back in the air too soon could endanger lives, say two Purdue aviation experts.
"U.S airspace was only closed for three days after 9-11 and became an impetus for an economic meltdown," says Purdue aviation technology professor Brent Bowen. "Not only did the U.S. government have to bail out our industry at a taxpayer expense in the billions, but other elements of the economy also were soon at risk."
Bowen, who co-authors the annual Airline Quality Rating (www.aqr.aero...), has studied the airline business for more than 20 years. He says the European shutdown is more than a frustrating inconvenience.
"This could put the global airline industry in a tailspin and halt the global economic recovery," he says. "The unforeseen consequences are almost beyond comprehension, and without the example of Sept. 11 we would not have any predictors of what to expect."
Purdue professor Erin Block, an aviation psychology expert, says the shutdown's impact on airline workers is profound and long-lasting, especially as airlines rush to begin flying again.
Flight gridlock caused by Iceland’s volcanic ash cloud blocked four men from traveling to Munich, Germany and attending the largest conference in their field this week.
Bob Grivetti of Peru, used parts manager at Patten Tractor/GreatLakes Equipment, Oglesby, said he and John Prostko, Patrick Sullivan and Bill Dears booked hotels 1½ years ago for the 29th International Trade Fair for Construction Machinery, Building Material Machines, Mining Machines, Construction Vehicles and Construction Equipment, otherwise known as “bauma 2010.”
“We were supposed to leave on Saturday and come back on the 26th,” Grivetti said. We’ve got $25,000 invested in this show. All we’re going to get back is our airline tickets, $1,100 for four people, $4,400.” Hotel rooms cost $1,600 per night for all four, for nine nights, and this is nonrefundable, Grivetti said.
The show is held every three years. This would have been Grivetti’s fourth year, he said.