Brought down to Earth
The Icelandic volcano’s plumes have cost European airlines at least $1.7 billion
Empty skies last week meant major losses for airlines, but other industries profited.
The ash spewed into the atmosphere by Iceland’s Eyjafjallajökull volcano paralyzed the skies last week, causing millions of złoty in losses for air carriers and travel agencies. Most of Poland’s airspace was closed from April 16-20, but restrictions were eased on April 21.
“There are no restrictions. Airports are making up for lost time,” Grzegorz Hlebowicz, spokesperson for the Polish Air Navigation Services Agency, said on Thursday.
Eurocontrol, which manages air traffic in Europe, estimated that 95,000 flights were canceled between April 15 and 20. The International Air Transport Association assessed that European airlines lost at least $1.7 billion.
Lot grounded
Poland’s flagship air carrier, Lot, is still calculating its losses. Company president Sebastian Mikosz said that “speaking of several million [złoty] a day is completely justified.”
Adrian Furgalski, an air market expert at Transport Consultants Group “TOR,” offered a ballpark estimate of zł.60 million in losses for the week. That’s a significant amount, considering that Lot ended 2008 with a loss of over zł.230 million.
“Costs directly connected to flying constitute around 30 percent of air carriers’ expenses; the remaining 70 percent are costs incurred irrespectively of flying, such as the leasing of planes or staff remuneration,” explained Grzegorz Sobczak, editor-in-chief of industry monthly Skrzydlata Polska.
Lot is reportedly interested in applying for state aid. Economy Minister Waldemar Pawlak stated last week that the government had not ruled out the possibility. Brussels seemed to be giving a green light, as EC officials said last week that they would be willing to ease rules on state aid for airlines.
Stuck abroad
According to estimates by the Polish Chamber of Tourism (PIT)
, up to 10,000 Polish tourists were trapped abroad at the height of the crisis.
“Most of them will be home by Sunday,” Paweł Lewandowski, deputy head of PIT, told Rzeczpospolita last week. “Thankfully, the scale wasn’t large because it’s not high season yet. Travel operators will manage and will not ask the government for financial help.”
“Polish law states that tour organizers have to take care of clients that cannot return home,” said Beata Sadowska, spokesperson for travel agency TUI Polska. “Of course everyone can interpret that differently, but TUI was providing clients with the same conditions that they paid for.”
TUI had around 300 Polish clients stuck abroad; the company expected to get them all home over the weekend. Globally, TUI estimated it was losing ?.6-7 million a day during the airport standstill.
“The companies will survive this time, but what happens if a similar situation occurs during the high season, when there are 400,000 Poles abroad?” Mr Lewandowski asked.
Windfalls
One industry’s loss is another’s gain. So it was that while the airline industry was in crisis, terrestrial means of transportation experienced a boom.
“The turnout on international trains rose by 100 percent,” said Paweł Ney, spokes-person for PKP Intercity.
Coaches also experienced a boom, especially on routes to the UK. “I think during those days we could have sent as many buses as we wanted to and they would still have been full,” said Grażyna Wojnowska, head of Eurolines.
Even taxis saw some big fares last week. Trapped in Warsaw, CNN producer Geoff Hill hailed a cab and headed for Berlin. The cost? Nine hours and zł.2,200.
Martyna Olik