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EU starts to count cost of volcanic ash

EU starts to count cost of volcanic ash

The European Union is counting the economic and political cost of six days of disruption to air travel caused by a cloud of volcanic ash from Iceland.

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Bitter recriminations have followed since flights were banned across much of European air-space, leaving hundreds of thousands of passengers stranded.

Airlines have criticised the decisions to close air-space, which were made by national air traffic control authorities, co-ordinated by Eurocontrol. They also accused the national governments and the EU of not responding quickly enough to the emerging crisis. The air-space was largely shut down on Thursday (15 April) but a meeting of transport ministers – by teleconference – was not convened until Monday (19 April).

Bo Redeborn, the director of air-traffic management strategies at Eurocontrol, pointing out that 40 countries and 27 EU transport ministers were involved, said: “The response has been rather prompt and quick. I honestly don’t think that when you had this number of actors it was an unreasonable time-frame.”

The European Commission was forced onto the defensive, explaining that it does not have responsibility for European air-space, in the absence of any EU-wide agreement to create a Single European Sky.

Commission President José Manuel Barroso has, however, charged Siim Kallas, the European commissioner for transport, Olli Rehn, the commissioner for economic and monetary affairs, and Joaquín Almunia, the commissioner for competition, with assessing the impact of the flights shutdown “on the air-travel industry and the economy in general”. Kallas, who is chairing the group, is to make a preliminary presentation to the next college meeting of European commissioners on Tuesday (27 April).

Airline organisations have been calling for national governments and the European Commission to offer them economic compensation for the effects of the flight ban.

The International Air Transport Association (IATA) said yesterday (21 April) that the volcanic ash had cost its members more than $1.7 billion (€1.27bn) in lost revenue. Giovanni Bisignani, IATA’s director-general, said that the impact of the crisis on his industry was greater than that of the terrorist attacks of 11 September 2001. “Governments should help carriers recover the cost of this disruption,” he said. He said that the EU’s airlines were forecast to lose $2.8 billion (€2.1bn) this year even before the Icelandic volcano erupted. Bisignani and Willie Walsh, the chief executive of British Airways, have said that governments bear a direct responsibility for the financial losses because they implemented unnecessary airspace closures.

The Association of European Airlines puts the cost for its members at close to €1bn. In addition to lost revenue, airlines have incurred costs during the crisis arising from having to provide care and assistance to stranded passengers, paying staff overtime, and laying on extra flights to repatriate people.

Associations representing Europe’s low-fare, regional and charter airlines said in a joint statement on Tuesday (20 April) that their members would be taken to “the point of bankruptcy” unless financial support was provided.

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Deficiencies in Europe’s railway industry were also exposed by the airline shutdown, as stranded passengers looked to use the railways to get home. MEPs called in a debate in the European Parliament on Tuesday for improvements to Europe’s rail network. Johannes Ludewig, executive director of CER, the rail industry’s European association, said: “We have to use this emergency as an opportunity to understand that if we want a reliable and safe European transport system then we have to invest more in rail infrastructure.”

Authors:
Jennifer Rankin 

and

Jim Brunsden 
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