European freeze haunts Christmas for airlines, shops

LONDON Tue Dec 21, 2010 2:59pm EST

1 of 33. Passengers sleep on makeshift beds in Terminal 3 at Heathrow Airport in west London December 21, 2010.

Credit: Reuters/Toby Melville

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LONDON (Reuters) - Northern Europe's big freeze wreaked more havoc on Tuesday as some airports failed to cope with the snow and retailers struggled 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 travelers 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 canceled 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.

With airlines feeling the growing cost of the chaos, European Union transport chief Siim Kallas said he was considering forcing airports to provide a minimum level of infrastructure support during severe weather.

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 canceled flights.

BAA, owned by Spain's Ferrovial, which runs the world's busiest international airport, said it was operating at much reduced capacity as the south runway remained closed.

However, Prime Minister David Cameron, whose coalition government has come under fire for its response to the extreme weather, told a news conference the runway would reopen on Tuesday evening.

Transport Secretary Philip Hammond said BAA had turned down an offer of army assistance to clear the snow.

"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 said it expected a significant number of cancellations to its shorthaul services from Heathrow, the carrier's main hub.

Analysts believe the freezing conditions are hitting BA's profit by around 10 million pounds ($15.55 million) a day. Its shares rose 1 percent to 268 pence by 1525 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.

Operator Fraport said it aimed to return to normal flight operations as quickly as possible but delays continued.

German flagship airline Lufthansa said it expected to resume an almost normal flight schedule on Wednesday, with all international flights back on track other than those to destinations such as Heathrow which cannot be reached.

German rail operator Deutsche Bahn said it would add extra train service from Wednesday to cope with a surge in demand due to air travel disruptions. Deutsche Bahn board member Berthold Huber said the added service would stay in place until December 31.

Hundreds of travelers 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, gifts, such as CDs and books, as the most vulnerable.

Heavy snow on the last Saturday before Christmas meant the number of shoppers visiting British stores was down by almost a quarter on the previous year, market researcher Synovate said.

"At a time when retailers were looking to play catch up, after the snowfall at the start of the month, the latest turn in the weather has dealt another cruel blow," Synovate's Tim Denison said.

With no let-up in the extreme weather in sight pre-Christmas profit warnings 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 by a fifth.

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

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