Monday, April 19, 2010

Economy News: Iceland's volcano ashes darkens European airlines profit

Eyjafjallajökull, Iceland's 5,466-foot volcano (1466 meters), days ago erupted. Besides the spectacular views, 700 evacuated and a giant cloud of ashes and dust covering almost all Europe, the volcano's eruption
is harming Airlines economy.

In fact, the European Commission announced that the economic impact of volcanic cloud will be greater than 9/11. Siim Kallas, the European Commissioner for Transport, at a press conference said that European Commission will bailout airlines of the states ask for it.

And he's right. If not as bad as 9/11, this (new) crisis gives more trouble to airlines, specially the European ones. Let's check the numbers:

- Airlines worldwide will lose $2,8 billion in 2010 after an estimated $9,4 billion cumulative loss last year, as the International Air Transport Association predicted last month

- European airlines will lose $1 billion, at a rate of $200 MM (185€ millions) daily

- At the stock market, Lufthansa dropped a 4'5%, Vueling 6'8%, British Airways 3'6% (worst of all British market), Air France 4'7% (worst rates of French market). Low cost companies as Easyjet and Ryanair, dropped a 3'8% and 4'8% respectively

- Six millions passengers affected (April, 19th), who losed their flight

How much this will last? Will the companies recovery from the crisis or they'll need the rescue of the European Union states? These are the questions over every the airline owner.

While this solves, enjoy the spectacle of the volcano


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