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Volcanic ash cloud: Business counts the cost of shutdown
20 April 2010 @ 01:18

British airlines and tour operators were left counting the cost of almost a week of airport shutdowns because of the volcanic ash cloud over Europe, as regulators came under increasing pressure to lift the flight ban.

With airports in Scotland and the north of England expected to reope on Tuesday morning, the International Air Transport Association (IATA) said the impacton the European airline industry had been more severe than the aftermath of the September 11 terrorist attacks, with losses reaching £165m a day.

British Airways said the disruption had cost it between £15m and £20m a day in lost bookings and payments to passengers stranded abroad. Willie Walsh, chief executive, has challenged the blanket ban on air travel and went up in a test flight on Sunday evening.

TUI Travel, the package holiday operator, said the flight ban had cost it £20mand would result in further losses of £5m to £6m a day.

Peter Long, chief executive, said authorities had been slow to help businesses. It took five days to arrange a conference call between European transport ministers, while his company has been in "crisis mode" since Thursday, he said.

Both BA and TUI Travel have called on the Government to compensate them for their losses.

The Association of European Airlines expects a spate of bankruptcies as airlines miss out on close to a week of new bookings.

A cloud of ash was thrown up into the atmosphere when the Icelandic volcano Eyjafjallajokull started erupting last week, causing aviation authorities to ground planes because of potential engine failure from contact with the ash.

Insurance companies do not expect to a lot of pay-outs because business interruption policies usually depend on damage being done to planes or airports.

Shares of BA, Easyjet, TUI Travel and Thomas Cook all fell on Monday. The price of jet fuel also fell as demand dropped.

Source: The Telegraph

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