Airline losses ‘devastating’

2010-04-21 12:02

The grounding of European flights from volcanic ash cost airlines

$1.7 billion (about R12.6 billion) in lost sales alone.

Chief of the International Air Transport Association (IATA),

Giovanni Bisignani said: “For an industry that lost $9.4 billion last year and

was forecast to lose a further $2.8 billion dollars in 2010, this crisis is


At its height, “the crisis impacted 29% of global aviation and

affected 1.2 million passengers a day. The scale of the crisis eclipsed 9/11

when US airspace was closed for three days,” he added.

For a three-day period from April 17 to 19, when disruptions were

greatest, lost revenues reached $400 million per day, he said, calling an

earlier IATA estimate of $200 million per day “conservative”.

In addition to the loss in revenues, and despite paying less for

fuel, carriers had to pay for accommodation for stranded customers as well as

food and alternative modes of transport to get them home, he said.

“We’ve seen a week without revenue but that has not stopped the

costs,” Bisignani, whose organisation represents about 230 airlines worldwide,


Bisignani urged governments to look at ways to compensate airlines

for the “extraordinary” crisis, something he said was exacerbated by “a poor

decision-making process by national governments”.

In the aftermath of the attacks on the United States on September

11, 2001, the US government provided $5 billion to compensate airlines for the

costs of grounding the fleet for three days, he said.

“I am the first one to say that this industry does not want or need

bailouts. But this crisis is not the result of running our business badly,” he


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