Geneva. Airline losses from the volcanic ash cloud have climbed above $1 billion, and the industry has demanded compensation from the European Union.
Airlines say they are losing as much as $300 million a day, with European companies like British Airways suffering the most.
An umbrella group for the airline industry has criticized European leaders’ handling of the disruption, which has grounded thousands of flights to and from Europe days.
“It’s embarrassing, and a European mess,” said Giovanni Bisignani, chief executive of the International Air Transport Association. The group complained that it saw “no leadership” from government officials.
“It took days to organize a conference call with the ministers of transport, and we are losing $200 million a day and passengers are stranded all over. Does it make sense?” Bisignani said.
Pierre-Henri Gourgeon, the No 2 executive at Air France-KLM, said: “There isn’t a real risk. Precautions that have been taken are certainly too restrictive.”
Air transport officials said losses could run as high as $300 million a day, although most analysts expect the effect on US airlines will be limited.
The disruptions caused by the ash cloud happened just as airlines were seeing demand pick up, particularly in the more lucrative business travel segment.
Last year the recession suppressed leisure and business travel, causing the industry to lose an estimated $9.4 billion.
British Airways said airlines had asked the EU for compensation for the closure of airspace, which began last Wednesday. BA’s London hub was among the first airports shut down.
“This is an unprecedented situation that is having a huge impact on customers and airlines alike,” BA chief executive Willie Walsh said.
“We continue to offer as much support as we can to our customers. But these are extraordinary circumstances that are beyond all airlines’ control.”
The airline industry has racked up $50 billion in losses over the past decade. The 9/11 attacks, epidemics of SARS and bird flu, increased security requirements and the economic crisis have all been cited as causes for decreased revenues.
After the 2001 terrorist attacks in the United States, the US Congress gave US airlines $15 billion in aid and loan guarantees, which may provide an example for European governments dealing with the volcano.
The prospect of continued losses and flight cancellations have dragged down the share prices of many airlines.
Associated Press
Steam and ash floating out to the northern Atlantic from the erupting Eyjafjallajokull volcano in Iceland on Monday.
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