European freeze haunts Christmas for airlines, shops

LONDON Tue Dec 21, 2010 9:25am EST

A passenger looks at the snow-covered tarmac of Zaventem international airport near Brussels December 20, 2010. REUTERS/Francois Lenoir (BELGIUM - Tags: TRANSPORT ENVIRONMENT)

A passenger looks at the snow-covered tarmac of Zaventem international airport near Brussels December 20, 2010.

Credit: Reuters/Francois Lenoir (BELGIUM - Tags: TRANSPORT ENVIRONMENT)

LONDON (Reuters) - Northern Europe's big freeze wreaked more havoc with flights on Tuesday as airports struggled to cope and retailers fretted they would struggle to make up lost sales in the few shopping days left before Christmas.

More planes got off the ground than on Monday but for thousands of travellers hoping to get home or away for Christmas, delays and cancellations were widespread.

Eurocontrol, which oversees air-traffic control across 38 countries, said it expected more services to operate after about 3,000 flights across Europe were cancelled on Monday.

Europe's weather woes are having far reaching implications, with Kenya warning it was likely to miss its 2010 tourism forecasts as a result of the flight disruption.

With more snow forecast, there was little Christmas cheer for those camped at London's Heathrow Airport waiting for flights or queuing for cross-channel Eurostar trains in sub-zero temperatures outside central London's St. Pancras station.

And with airlines feeling the growing cost of the chaos, Europe's transport chief said he was considering forcing airports to provide them with a minimum level of infrastructure support during such severe weather.

"I have become increasingly concerned about the problems relating to the infrastructure available to airlines -- airports and ground handling -- during this severe period of snow," European Union transport commissioner Siim Kallas said.

NO REFUGE

Heathrow looked more like a refugee camp with angry and frustrated passengers camping in departure halls as they awaited information on delayed or cancelled flights.

Operator BAA, owned by Spain's Ferrovial (FER.MC), which runs the world's busiest international airport, said its south runway would remain closed again on Tuesday, meaning the airport would operate at significantly reduced capacity.

British Transport Secretary Philip Hammond said BAA had turned down a government offer of troops and vehicles to clear snow from the runway at Heathrow.

"We've offered them troops today if they need additional manpower here to clear snow...we can offer them military support to do that, but the airport authority says, in fact, they have plenty of manpower to do this work," he told Sky News.

British Airways BAY.L said it expected a significant number of cancellations to its shorthaul services from Heathrow, the carrier's main hub. It blamed severe weather for the disruption, which it said would continue up to Christmas.

Analysts believe the freezing conditions are hitting BA's profit by around 10 million pounds a day. Its shares rose nearly 1 percent to 268 pence by 1406 GMT, in line with the FTSE100 blue-chip index.

London's Gatwick Airport, which closed overnight due to renewed snowfall, re-opened at 0600 GMT but passengers were told to expect further disruption, delays and cancellations.

Flights to and from Frankfurt airport, continental Europe's biggest, resumed on Tuesday morning after the airport was shut for several hours overnight. "It is our goal to return to normal flight operations as quickly as possible," a spokesman for operator Fraport (FRAG.DE) said.

The picture was slightly brighter for air travellers in Belgium after handling agents at its main airport managed to get hold of de-icing fluid after saying on Monday they might run out, allowing the departure of some planes.

But hundreds of travellers were left stranded on trains between London and the northeast of England after damage to overhead power lines brought services to a halt.

RETAIL FAILS

With most festive shopping done in the two weeks before Christmas, European retailers are worried they are running out of time to make up lost ground.

Analysts see retailers focused on low margin, non-food, gifting items as the most vulnerable.

"The snow across the country (UK) is having a dramatic impact, with sales running as much as down 50 percent in heavily affected areas," said Andrew Wade, analyst at Numis Securities.

With no let-up in the extreme weather in sight pre-Christmas profit warnings from retailers have already started.

Alexon, the womenswear retailer with 990 outlets in the UK and Europe, warned its sales had slumped 20 percent over the last three weeks, sending its shares down a fifth.

(Additional reporting by Stefano Ambrogi, Martin Zwiebelberg in Frankfurt, Pete Harrison in Brussels; Editing by Jane Merriman and Alexander Smith)

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