The volcanic eruption which occurred on April 17 under-neath the Eyjafjallajoekull glacier in Iceland grounded most flights for up to six days throughout Europe.According to an Associated Press report published on Wednesday, April 21, airlines announced that they had lost at least $1.7 billion as a result of the economic fallout and travel shutdown caused bythe volcanic eruption.
A news release issued by the AP estimates that the entire aviation industry suffered losses in the amount of $3.3 billion as a result of the closures.
Giovanni Bisignani,head of the International Air Transport association, said in a news conference that airlines lost an estimated $400 million each day during the first three days of grounding as a result of theEuropean government's fear of the risk that volcanic ash could pose to airplanes.
Because of the presence of ash in the atmosphere at commercial flight levels, IFR air traffic was suspended or severelylimited in most of western and central Europe, save for Portugal, Spain, southern Italy and Greece. This caused an unprecedented disruption of passenger and freight traffic into and out of Europe, andwithin the continent. In fact, the whole world was affected, since airlines on every continent have had to cancel flights to and from Europe.
Air carriers lost millions and millions in revenueeach day, and faced with the prospect of huge operating losses of a magnitude that threatens their very survival.
European carriers were hit the hardest; their 11.7% drop in passenger traffic didnot help the country's slow recovery from the downturn and currency crisis.
Global load factors also dropped from 78% in March to 76.9%, while freight load factors dipped to 55.3% from the 57.1%recorded in the previous month.
Aramex logistics company managing director Jim Armour says the shutdown cost his company about a quarter of its daily revenue. The real problem is the uncertainty he...