Global business counts cost of European air chaos (News Feature)

By Andrew McCathie Apr 21, 2010, 17:48 GMT

Berlin - European air travel is slowly starting to return to normal as businesses around the world try to count the cost of a week of airline chaos.

Apart from the 1.7 billion dollars the International Air Transport Association said the air ban has cost its members, companies have also been attempting to assess the fallout for their businesses of the failure to deliver orders, delays in receiving spare parts, cancelled meetings, and stranded staff.

About 40 per cent of German exports are transported by air and the volcanic ash scare came as the European economy struggles to recover from what has been the region's biggest economic slump in more than 60 years.

For many fresh goods suppliers to Europe forced to dispose of their products, the cost of the airspace shutdown has been all too clear. The Kenyan flower industry said that thousands of tonnes of cut flowers were now rotting in warehouses.

'Looking at last year, where we did exports worth 36 billion shillings (466 million dollars), we would have wanted to hit the same target,' Jane Ngige, head of the Kenya Flower Council told the German Press Agency dpa. 'We are already looking at a billion gone ... it's a major setback.'

The world travel industry has also been hard hit by the airline shutdown, which alone has so far cost the French travel business about 200 million euros (268 million dollars), French Tourism Minister Herve Novelli said Wednesday.

Apart from the more than 7 million passengers caught up in the air chaos, delivery companies have been struggling to find ways around the ban, which at its height shut down more than 300 airports across Europe.

'What we normally do with 50 airplanes, we did with trucks and rail,' said Joerg Wiedemann, a spokesman for the global delivery group DHL.

'We're happy it went so well. It could have been worse,' he said, noting that the company had had no contingency plans in place before last week.

'No one ever counted on the fact that all of European - or large parts of European - airspace would be blocked,' he said.

Certainly, there have been a few winners from the long air ban. Both travellers and companies have been forced to seek out alternative forms of transport either to reach home or get their goods to markets.

Besides buses, trains, ferries and car and truck rental companies, it seems several taxi drivers hit the jackpot with some desperate travellers willing to pay a handsome price for the journey home.

British comedy star John Cleese forked out a whopping 4,600 dollars for a cab ride from Oslo to Brussels after the ash cloud from Iceland's Eyjafjalla volcano grounded flights across Europe.

Other stranded airline passengers have said they were essentially on the go for the entire period of the shutdown as they battled to reach their destinations using every available means of transport.

This included air from the US to southern Europe and then train, bus and ferry to England with waits in between as they joined the scramble for available seats.

Most ordinary travellers have been left out of pocket by the European air crisis, forced to pay for extra hotel bills as they waited for the volcanic ash threat to recede.

There have also been allegations from stranded travellers that some hoteliers jacked up their prices to take advantage of their plight. Others have complained that rescheduling has proven complicated with some budget airlines.

The air shutdown also represents the latest setback to Europe's fragile recovery. Signs have already started to emerge of the impact of a bitterly cold winter on the European economy as it entered the new year.

For the moment, however, most analysts think that the air chaos is unlikely to put the economic recovery at risk, saying that the impact on the European economy is likely to be minimal.

This is despite the airline industry claiming that the volcanic ash crisis could prove to be bigger than the September 11 terrorist attacks on the US. Back then American airspace was only shut down for 3 days.

Moreover, many businesses around the world along with the weary travellers who have managed to make it home, could now face a long and nervous wait to see if their travel insurance companies will pay out for an act of god.