Airlines lost more than $1.7 billion by Tuesday: IATA
FRANKFURT/BERLIN (Reuters) - The International Air Transport Association (IATA) estimates that the crisis caused by a volcanic ash cloud above Europe cost airlines revenues of more than $1.7 billion by Tuesday.
"For an industry that lost $9.4 billion last year and was forecast to lose a further $2.8 billion in 2010, this crisis is devastating," IATA Director General and Chief Executive Giovanni Bisignani said in a statement on Wednesday.
Speaking at a press briefing in Berlin, Bisignani said that he expects it will take the airline industry at least three years to recover from the volcano crisis.
Most of Europe's airspace closed on Thursday after a huge ash cloud from an Icelandic volcano spread out, stranding millions of business passengers and holidaymakers and paralyzing freight and businesses worldwide.
On the three days from April 17 to April 19, when the air traffic disruptions were the biggest, lost revenues reached $400 million per day, IATA said. At its worst, the crisis affected 29 percent of global aviation and 1.2 million passengers a day.
By Wednesday morning, most of European airspace was open for business, but with so many planes having been grounded it could take days or weeks to clear the backlog.
SMALLER FUEL BILL
While the shut-down led to lost revenues for airlines, it also lowered their operating costs for a short time, Bisignani said. Fuel costs dropped by $110 million a day, for instance.
Overall, Bisignani reiterated that the hit by the volcano crisis was bigger than the impact of the September 11 2001 attacks, which left airlines grounded for three days.
Bisignani urged governments to examine ways to compensate airlines for lost revenues. The U.S. government provided $5 billion to compensate airlines after the September 11 attacks, and the European Union also provided assistance to carriers.
Lufthansa Chief Executive Wolfgang Mayrhuber, speaking at the same Berlin press briefing as Bisignani, said he will not apply for compensation to offset the soaring burden.
"At the operating level, we estimate that Lufthansa's loss will exceed 100 million euros ($134.4 million) and could go as high as 200 million euros if the disruptions to traffic remain substantial until next week," LBBW analyst Per-Ola Hellgren said.
But he said that the carrier should be able to recover some of the losses as early as next week as passengers who postponed their trips fill seats on Lufthansa aircraft.
Singapore Airlines, the world's second-largest airline by market value said ash-related disruptions had cost it $29 million from cargo and passenger operations.
Shares of Lufthansa were up 1.1 percent at 12.755 euros by 5:15 a.m. EDT, while the STOXX Europe 600 Travel & Leisure was up 1.5 percent.
British Airways was up 1.2 percent at 236.6 pence, and Air France-KLM was 0.9 percent higher.
(Reporting by Maria Sheahan; additional reporting by Kerstin Schaff in Berlin; Editing by Rupert Winchester)
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