KUALA LUMPUR: The International Air Transport Association (IATA) has estimated the Icelandic volcano crisis costs airlines more than US$1.7 billion in lost revenue as at Tuesday — six days after the initial eruption last Thursday.For a three-day period between April 17 and 19 when disruptions were at the height, lost revenues reached US$400 million a day.
“Lost revenues now total more than US$1.7 billion for airlines alone. At the worst, the crisis impacted 29 per cent of global aviation and affected 1.2 million passengers a day. The scale of the crisis eclipsed 9/11 when US airspace was closed for three days,” said Giovanni Bisignani, IATA’s director-general and chief executive officer. IATA noted there are some cost savings related to the flight groundings. For example, the fuel bill is US$110 million a day less compared to normal. But airlines face added costs including from passenger care.
“For an industry that lost US$9.4 billion last year and was forecast to lose a further US$2.8 billion in 2010, this crisis is devastating,” he said.
“It hit hardest when the carriers are in the most difficult financial situation.
Europe’s carriers are already expected to lose US$2.2 billion this year — the largest in the industry.
“As we are counting the costs of the crisis, we must also look for ways to mitigate the impact. Some of our airport partners are setting the industry’s best practices,” said Bisignani.
“London Heathrow and Dubai are waiving parking fees and not charging for repositioning flights. Other airports must follow,” he said. But the larger role is for governments.
Bisignani made four specific requests for regulatory relief — •Relax Airport Slot Rules: IATA urged rules on take-off and landing slot allocation (use it or lose it) be relaxed to reflect the extraordinary nature of the crisis; •Lift Restrictions on Night Flights: IATA urged governments to relax bans on night flights, so carriers can take every opportunity to get stranded passengers back home as soon as possible; •Address Unfair Passenger Care Regulations.
He said the crisis is an “act of God—completely beyond the control of airlines”. Insurers certainly see it this way. — Bernama