Indian Carriers Lose Rs 30cr/day on Volcanic Ash Crisis
04/20/2010

Airlines around the globe have taken a heavy hit as all flights across Europe, UK and US have been suspended due to the huge ash cloud from an Icelandic volcano. Some reports are calling this volcanic ash crisis worse than the 9/11 for airlines.

Online PR News – 20-April-2010 – – Airlines around the globe have taken a heavy hit as all flights across Europe, UK and US have been suspended due to the huge ash cloud from an Icelandic volcano. Some reports are calling this volcanic ash crisis worse than the 9/11 for airlines.

Commenting on the impact on business of the aviation sector across Europe, Albert Tjoeng, Assistant Director, IATA said back during the 9/11 attacks, US air space was closed for three days, but in this case, Europe’s air space has been closed for about five days. He said, “Airlines are estimating for each day closed losses of about USD 200 million a day. This is excluding the added cost of action taken by airlines to pay their passengers including hotel accommodation, providing food and other expenses.”

Tjoeng added it would be anybody’s guess when things were expected to get back on track and it was dependent on wind direction and the volcanic activity. “We are asking governments to rethink the way the air space closures had been done.”

Meanwhile, train stations in London have been very busy over the past few days due to the volcanic ash disruption. The Saint Pancras Station has seen 50,000 additional passengers alone between Thursday and Sunday with many more expected over the next couple of days. The Station has announced around Midday that there are no more trains available for the rest of Monday.

The situation is very serious for the travel and tourism industry. AEAE has said that some airlines could go bust as a result of the massive amounts of money being lost by them per day in business.

The Indian aviation space is no different. Indian airlines i.e. Jet Airways, Kingfisher and Air India are said to be losing approximately Rs 30 crore per day, reports CNBC-TV18’s Swati Khandelwal Jain. Over the last three days, all the three airlines have cancelled over 60 flights.

About 40-50% of total revenues of these carriers come out of international operations. Load factors are typically in the region of 75% during peak season. Margins, which are particularly good during peak seasons, are likely to be severely hit because of the closures.

Air India and Jet Airways however have started operations on the US, Canada routes. Jet Airways has diverted its flights via Athens both to the US and Canada. Its London operations, however, still remain suspended.

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