Volcano chaos losing Asia carriers 40 million dollars a day

SINGAPORE, April 20, 2010 (AFP) - Asia Pacific airlines are losing an estimated 40 million dollars a day from the closure of European airspace due to a volcanic eruption, the head of an industry group said Tuesday.

Andrew Herdman, director-general of the Association of Asia Pacific Airlines (AAPA), also joined a clamour for European authorities to urgently review the closures with a view to reopening certain routes.

Thousands of flights have been cancelled and hundreds of thousands of passengers stranded worldwide since last week after European authorities designated much of the continent a no-fly zone due to ash clouds spewing from the volcano in Iceland.

The authorities fear that the ash and dust could pose a danger to jet engines and airliner airframes, but carriers worldwide have slammed the blanket shutout.

"As a matter of urgency, all the relevant parties... need to do an urgent review of the overall situation to gather all information on the real nature of the dispersion of ash across Europe," Herdman told AFP.

This would help them "make a decision accordingly as to which part of airspace can be reopened."

"This should be a priority both in economic and political terms," he said.

"We need to base our decisions on as many facts as we can about the actual concentration of ash in European airspace, and we need to come up with a plan to reestablish and reopen European airspace when conditions allow."

While it was difficult to accurately calculate the losses, he cited one "reasonable estimate" that the cost for Asia Pacific airlines could reach 40 million dollars a day in lost revenue.

This is based on estimates of Asian carriers's incomes on European routes and assuming that most of the flights had been cancelled, he said.

The International Air Transport Association (IATA) has estimated the loss for global airlines at 200 million euros (270 million dollars) per day.

Europe accounts for an average 15 percent of passenger revenues for Asia Pacific carriers, although the figures vary among the airlines, Herdman said.

While cargo between Europe and Asia is mostly transported by sea, the goods carried by airplanes include high-value items, so the economic impact could be significantly higher relative to the tonnage, he noted.

AAPA groups 17 carriers in the Asia Pacific region, including Singapore Airlines, Cathay Pacific, China Airlines and Australia's Qantas.


by Sam Reeves
(c) 2010 AFP