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Volcano causes $1 billion airline loss

As airline losses from the volcanic ash cloud spiraled over $1 billion on Monday, airlines started demanding EU compensation and the aviation industry sharply criticised European governments for not using scientific measures to evaluate the ash and open up their airspace.

world Updated: Apr 19, 2010 23:43 IST

As airline losses from the volcanic ash cloud spiraled over $1 billion on Monday, airlines started demanding EU compensation and the aviation industry sharply criticised European governments for not using scientific measures to evaluate the ash and open up their airspace.

“A European mess,” IATA chief Giovanni Bisignani said.

Shares of some European airlines fell as flight disruptions from the volcanic cloud moved into a fifth day, and the International Air Transport Association complained of “no leadership” from government leaders _ one of whom admitted to EU dissension about how to respond.

The IATA particularly criticised Europe’s methodology of closing airspace based on theoretical modeling of the ash cloud. “We have seen volcanic activity in many parts of the world, but rarely has it resulted in airspace closures — and never at this scale,” Bisignani said.

“When Mount St Helens erupted in the US in 1980, we did not see large-scale disruptions, because the decisions to open or close airspace were risk managed with no compromise on safety.”

Any decision on reopening air traffic in Europe will have safety as its main consideration, the Spanish EU presidency said in response.

“Our main concern is everything that concerns safety and prevention,” said Spanish Transport Minister Jose Blanco, whose country holds the rotating presidency of the EU.

Bisignani said: “It took five days to organise a conference call with the ministers of transport and we are losing $200 million per day (and) 750,000 passengers are stranded all over. Does it make sense?”

European civil aviation authorities held a conference call on Monday about what steps could be taken toward opening airspace, and transport ministers from all 27 EU member states were to hold another later in the day.