European airlines hardest hit by Icelandic volcano

European airlines, which were already slow to recover from the global economic crisis, are likely to be the worst hit by the shutdown of European airspace last week due to the cloud of volcanic ash coming from Iceland.

Reuters

The recovery of global air traffic accelerated in March, with a 10.3 per cent increase in passenger traffic, according to data released by the International Air Transport Association (IATA). But European carriers lagged behind, with just six per cent growth.

And April’s figures will surely be lower, as the ash from the eruption of Iceland’s Eyjafjoell volcano on 14 April shut down European air space for several days.

IATA Director General Giovanni Bisignani predicted that European carriers would suffer the most from the shutdown.

"European carriers were already showing the weakest recovery from the [global] financial crisis through March. The volcanic ash crisis hit the weakest part of the industry the hardest," he said in a statement.

The industry lost some 1.3 billion euros in revenue, mostly by European carriers. French airlines and tour operators lost 260 million euros, according to the to the French junior minister for tourism, Hervé Novelli.

The loss of revenue, coupled with the rising cost of oil will proably mean ticket prices will rise.

According to a study by the British Centre for Economics and Business Research consulting firm commissioned by the shopping site Kelkoo.com, ticket prices in the UK will rise an average of 5.2 per cent in 2010. This would translates into an 55 euro increase per ticket.