Airlines Cope With Fallout From Icelandic Eruption

No large passenger planes were seriously damaged by the corrosive cloud of volcanic ash that has grounded flights across Europe today—but the airlines themselves are in battered shape. With the United Kingdom's air traffic suspended indefinitely and other countries across Northern Europe beginning to close airports, aviation in the region is in shambles. When the skies finally do clear of the damaging particles, airlines will be stuck with the wrong aircraft in the wrong places, recalling the nationwide grounding in the United States that followed the September 11 terror attacks.

Reuters reported that the volcano trouble comes at an especially bad time for European airlines, just when the industry's fortunes were beginning to pull out of the recession. Today's total disruption will be far worse than the effects of recent labor strife—British Airways, for example, lost roughly $10 million a day during a week of strikes in March despite only canceling 20 to 40 percent of flights, Reuters said.

The volcano eruption isn't just grounding airlines; its effects are likely going to ripple throughout the travel industry. Spokesmen for the cruise industry said they hope to be minimally affected—many travelers will be unable to reach their ports of departure in time, obviously, but several lines announced plans to remain in port for a day to give passengers at least a chance to join their ships. Hotels were faced with the complications of having some guests unable to check in, and others unable to check out. Direct and ripple effects on cargo and freight operations have not yet been quantified, but are expected to be large. The eruption of Eyjafjallajokull, reports, an equine news site, has even led to "the suspension of equine frozen semen shipments at the height of the breeding season."

After initially falling, stocks of the major U.S. airlines began reacting to the eruption in different ways: Continental was up 2.24 percent on the day and United 5.28 percent, while US Airways was essentially flat, and JetBlue lost 0.75 percent. In Europe, Ryanair was down 1.45 percent, while British Airways posted a small gain of 0.03 percent.

Join the Discussion