Airline industry’s uncertain future

2010-04-23 08:10

 Thousands of flights are crisscrossing Europe, but things are far from normal: the cloud of volcanic ash and the nearly week-long shutdown of air traffic have added another element of uncertainty to the hassles of flying.

There has been debate around the correct response by airlines and governments to the ash even as the world watches Iceland for any signs of another big eruption.


Just as the September 11 terrorist attacks and other attempts to blow up planes heralded a new era of ultra-tight security at airports, the eruption of the Eyjafjallajokull (pronounced ay-yah-FYAH-lah-yer-kuhl) volcano that grounded much of Europe could prove to be a game-changer in the history of aviation - or at least keep things extremely unsettled for a long time.


Some people are saying they’ll think twice about taking a plane if trains – slower but more reliable – are available instead.


Harry Howelber, a 28-year-old telecommunications operator in Paris, said: “I’d just be afraid of flying into a cloud.”


Experts noted the profound psychological impact the ash cloud has had on travellers.


David Henderson, spokesperson for the Association of European Airlines, said: “There have been a number of occasions when air travel has been impacted by people’s fears of terrorist events or wars. But it’s rare for natural phenomena to cause the same reaction.”


Travel industry observers, however, do not believe the volcano will affect the way Americans travel to Europe.


Guidebook writer Arthur Frommer said: “I don’t think they’ll be frightened of flying. Look how fast we returned to flying after September 11, even though the possibility of terrorists getting on a plane continued.”


The International Air Transport Association noted that passenger numbers rebounded several years after 2001.

Frommer said he and his wife are about to book tickets for a trip to Scotland: “Here I am planning to go to Europe
 
on August 16, and it never once crossed my mind.”


Rudy Maxa, host of public television’s travel show Rudy Maxa’s World, agreed that the disruption wouldn’t affect flight bookings, particularly if people weren’t personally affected, because Americans always want to travel to Europe.

Maxa said:“I think it’s really a one-off. I don’t think it will be a game-changer.”


Adam Anderson, public relations director of Expedia.com, said the site “saw a (not unexpected) spike in cancellations for the week of April 15-20” – the week the eruption began.


Anderson said: “We have not, however, seen a correlative dropoff in bookings to the top 20 European destinations, when examined on a week-over-week basis.


“There was a drop in London bookings, but not elsewhere. So the net is that the issue seems to have impacted existing flights, but not new ones.”


Travelocity senior editor Genevieve Shaw Brown said it was too early to gauge the long-term impact because bookings to western Europe are made, on average, three to four months in advance.


Brown said: “People travelling in the near future have had these plans in place for quite some time. However, time and time again, travellers prove they’re resilient, committed to taking their vacations, and because the situation seems to now be well under control, I don’t think there will be any significant long-term impact on travel to western Europe.”


Charles Schmitt, a corporate travel manager at Classic Travel Service in New York, said his clients are eager to get back onto planes: “They’ve got business to do. They’ve got to get to their various appointments.”


But Ishfaq Ahmad, an owner of Sunline Travel, a small New York agency, said his business is down about 50%: “It’s very slow. We are getting very few calls at the moment. People are still scared.”


The eruption occurred against the backdrop of an economic slump that has ravaged the aviation industry.


More people view flying as a painful ordeal of annoying security checks, shrinking leg room, deliberate overbooking and increasingly awful food.


Financial pressures have forced airlines to keep costs down – resulting in bare bones in-flight service that has helped win coach class the unflattering nickname “cattle class”.


Experts say the chaos created by the ash plume could send a further chill through an already beleaguered industry.


Howard Wheeldon, senior strategist at BGC Partners in London said: “I doubt that a situation that lasts 10 days to two weeks will bring down any established airline but there will be some lasting effects. Airlines are still weak, and this will have made them a lot weaker.”


In a note published by London international affairs think tank Chatham House, authors Vanessa Rossi and Will Jackson said airlines would likely be forced to offer discounted air travel in the short run, something that would bite into their “already tight profit margins and revenues for tourist resorts”.


They said: “In the worst-case scenario, in which the volcanic risk bubbles on, intermittently shutting down North European air space through the rest of the year, there would almost certainly be no economic recovery in Europe in 2010.”

Maxa agreed that the airlines might offer some deals, but only in the “very short term”.

Compounding the uncertainty is the possibility Eyjafjallajokull – or an even more powerful volcano nearby called Katla – could erupt again and again, making the world relive the whole crisis.


The two volcanos are side-by-side, and while scientists say it’s difficult to predict when a volcano will erupt, the last three times that Eyjafjallajokull went off, Katla did as well. Katla typically awakens every 80 years or so. It last exploded in 1918.

Aviation authorities remain deeply divided about the proper response to a massive eruption. Many now say the decision to ground flights was an overreaction: Blanket closure of airspace led to the cancellation of more than 100?000 flights.


European governments and civil aviation authorities have defended their decision to ground fleets and close the skies against heated accusations by airline chiefs that the moves were based on flawed data or unsubstantiated fears.

The European Union (EU) has already moved urgently to implement a major reform of the continental air traffic management system, whose fragmentation has been blamed for the uncoordinated response to the ash cloud.


EU spokesperson Helen Kearns said yesterday the crisis had exposed serious flaws that must be corrected quickly: “Consumers and businesses have paid a high price over the past few days for a fragmented patchwork of airspaces.”


The EU has 27 national air traffic control networks, 60 air traffic centres and hundreds of approach centres and towers.


The airspace is a jigsaw puzzle of more than 650 sectors, and any real streamlining of the system will require at least another five to ten years.


Still, most analysts said they expected the aftershocks to subside gradually, as they did in the United States after 9/11.


Richard Maslen of Airliner World, a British industry publication said: “Inevitably, when people make a decision and the events of the past week are fresh in their minds, they may think twice about flying and may opt to take the train rather than fly. That’s what happened after 9/11.

But I can’t see it as being a problem in the long-term because people will just not want to give up the mobility that flying affords.”


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