BizJournals Portfolio

Back in the Air

The latest from Europe: British airports are reopening, along with those in Germany, France and other countries. But there's still a huge backlog of passengers to work through.

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Britain suddenly lifted a six-day ban on air traffic Wednesday as other airports throughout Northern Europe also shifted back into service. But though many airlines are back to flying internationally, a huge backlog of passengers remain on the ground after nearly a week of closed airspace. Here's the latest on the aftermath of the eruption of Iceland's Eyjafjallajokull volcano:

The Big Picture

British Airways planned to operate all of its international flights from London's Heathrow and Gatwick airports. Air France and Lufthansa expected to fly all of their long haul flights. American and Asian carriers planned to resume flying as well.

Domestic service in the various nations of Europe was getting back on track, but was not yet at 100 percent Wednesday morning. Officials with the United Kingdom's Met Office expected winds to continue blowing ash to the west, out of European airspace, allowing for more planes to be able to fly.

Already, the shut down caused by the volcano has been twice as long as the closure of American airspace following the September 11, 2001 attacks. Though airports were getting back to normal operations, it could take weeks to work through the backlog of passengers stranded all over the world. Some 100,000 flights were canceled during the crisis.

“We have to be realistic,” Cathay Pacific said in a statement. “When services resume, all airlines around the world will be competing for landing slots at airports, and airspace and airports are going to be horribly congested.”

“Lost revenues now total more than $1.7 billion for airlines alone. At the worst, the crisis impacted 29% of global aviation and affected 1.2 million passengers a day. The scale of the crisis eclipsed 9/11 when US airspace was closed for three days,” Giovanni Bisignani, CEO and director general of the International Air Transport Association, said in a statement.

Bisignani called on governments and airport authorities to work with airlines to mitigate the impact of the crisis.

“As we are counting the costs of the crisis we must also look for ways to mitigate the impact. Some of our airport partners are setting industry best practice. London Heathrow and Dubai are waiving parking fees and not charging for repositioning flights. Others airports must follow,” said Bisignani.

He called on governments to look into compensating airlines for the disastrous blow to their revenue.

“I am the first one to say that this industry does not want or need bailouts. But this crisis is not the result of running our business badly. It is an extra-ordinary situation exaggerated with a poor decision-making process by national governments. The airlines could not do business normally. Governments should help carriers recover the cost of this disruption,” said Bisignani.

Airlines Not the Only Ones Affected

While airlines in Europe certainly took the hardest hit from the closures, the impact could be felt throughout the world, in industries such as hotels, where many reservations were canceled, while stranded tourists and business people had to extend their stays.

For Lisa Grossberg's foreign guests at the Buckingham Hotel in Manhattan, the adventure has been an extra long one. And Grossberg, the general manager, and her staff, have been trying to work with guests extending their stays, as well as those who can't come take advantage of their reservations.

“In all my years this is not something that I thought I would have to deal with—volcanic ash,” she told Portfolio.com. “There’s really nothing anybody can do.”

Steven Kipnis of the Affinia Manhattan Hotel said around 100 rooms at his hotel were occupied by foreign guests, and that his staff was trying to be as helpful as possible to those who have had to extend their stay as many as five or six days.

“It’s an unsettling time for them, and understandably,” he said. “Our concierge is working night and day,” checking flights from New York to Europe.

David Chien, director of marketing for Gray Line New York, which operates double-decker tour buses of the city, said in an email to Portfolio.com that the crisis had hammered the city's tourism business.

“The volcano eruption in Iceland has resulted in a loss of approximately 12,000 international visitors per day to New York City, affecting tourism spending,” Chien wrote. “International tourists make up 20 percent of visitors to New York, but they account for half of all tourism spending. In fact, international tourists spend approximately $1,500 per visit. New York City businesses however, such as hotels and transportation services, are really banding together to help stranded travelers. Many are offering discounts such as percentages off and more.”

For more on how executives, small business owners, and entrepreneurs have been affected by the European air disruption, click here.

Tallying the Losses

Meanwhile, U.S. airlines took hits from the European disaster. Here's a look at the revenue U.S. airlines lost every day in the disaster:

  • Delta—$10.4 million loss in revenue with an operating loss of $6.5 million
  • United—$8.4 million loss in revenue with an operating loss of $5.2 million
  • American—$7.6 million loss in revenue with an operating loss of $4.6 million
  • Continental—$5.6 million loss in revenue with an operating loss of $3.4 million
  • US Airways—$3.7 million loss in revenue with an operating loss of $2.2 million

Read more: Analyst: Volcano delays could cost American millions—Dallas Business Journal:


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