Thursday, 22 April 2010

Volcanic Disruption – Airlines Count the Cost



Tuesday 20th April 2010 PRESS RELEASE


Volcanic Disruption – Airlines Count the Cost


After the first week of wide spread disruption resulting from Iceland’s Eyjafjallajokull volcano, industry experts are already saying the impact on the airline industry will be worse than 9/11.


Within a few days of the disaster 313 airports were paralysed across Europe and by Sunday only 4,000 of the 24,000 flights that would normally operate across Europe were made, report Eurocontrol, the air-safety agency which also confirmed that by Sunday night more than 63,000 flights would have been cancelled.


Airlines are estimated at losing ‘well in excess of £100m per day’ said Alistair Beveridge of Zolfo Cooper, the restructuring firm, who added in the Financial Times that the situation was ‘burning airlines cash stockpiles at an alarming rate. An concern grows that weaker airlines might be unable to last out the crisis.’


Even bitter rivals Easyjet, British Airways and Virgin Atlantic have joined forces and were among airlines who wrote to the Prime Minister warning that the disaster ‘could have material impact on our positions going forward’.


“In short, the situation is becoming untenable,” executives said as they look to the Government for compensation similar to that provided after 9/11.


Specialist travel financial failure providers, ProtectMyHoliday.com is reporting a spike in sales since the disaster struck. ‘Daily sales have quadrupled since the scale of the eruption as people worry about the security of their airlines’, reported Michael Ward, Key Account Manager of International Passenger Protection Ltd, the company who provide the direct sell website.


‘It isn’t just the airlines who will be affected’, Ward continued ‘other travel organisations will also be feel the effects such as hotels, car hire companies and excursion providers’.


‘This event occurred just when IATA indicated a year on year a sharp upturn in February following two years of dire financial results since the start of the recession. It could not have happened at a worse time’, Ward concluded.


Volcanic Disruption – Facts and Figures:

Lufthansa - £22m per day

British Airways - £20m per day.

Emirates - £10m per day, £1m because of accommodation and meals for 6,000 stranded passengers

Around 150,000 Britons are stuck overseas (as of 20/04/2010).

For more information about Financial Failure Travel Insurance Visit http://www.jml-insurance.co.uk/displayproduct.php?id=319&sec=8

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