Before April 15 few had ever conceived that Ireland could be closed to all air traffic due to ash clouds from an unheard of, and unpronounceable, volcano under the Eyjafjallajokull glacier in Iceland. Yet we are now all too familiar with the havoc it has visited on the travelling public, the airlines, airports and tourism industry across Europe.
The cost of the 5 day shutdown of most of Northern Europe in mid April is estimated by IATA to have resulted in 100,000 cancelled flights and a loss of airline revenue of at least €1.3 billion, not counting the cost of putting up stranded passengers and crews.
The cost to Irish carriers has been put at €40 million for Ryanair, €20 million for Aer Lingus and up to €5 million for CityJet. In addition, Dublin Airport Authority (DAA) reckon it lost €8 million, while the Irish Aviation Authority (IAA) estimates a loss of €4 million. These estimates do not include the impact of the most recent restriction on May 16/17, which grounded 1,000 flights.
The bad news is “there are no signs of the eruption slowing down yet", according to Magnus Tumi Gudmundsson of the University of Iceland,. However the good news overnight is an announcement from the British aviation authorities of the creation of a new flying zone with Irish officials and aircraft manufacturers to limit the disruption caused by ash emitted by the volcano.
The new "Time Limited Zone" coming into force today will allow airlines to fly through areas of medium ash density that were previously off limits. Hopefully, this will mean a lessening of the grounding of flights despite the lingering ash clouds overhead.
The grounding of flights with the declaration of blanket no fly zones has come in for severe criticism from airlines, pilots representative bodies, travel businesses and others, who argue that airlines continue to operate in other parts of the world despite volcanic eruptions within the safety tolerances prescribed by the manufacturers. BA’s Willie Walsh has perhaps been most outspoken in calling the closures of European airspace as a "gross over-reaction to a very minor risk." The experience of the past few weeks seems to have forced the authorities and scientists to refine and improve on their models for predicting the location and density of ash clouds and has brought about a better modus operandi between airlines, supported by engine and airframe manufacturers, and the air traffic authorities.
Tourism Prospects D-ashed?
While we may be faced with disruption, hopefully on a lesser scale, should the volcano remain active over the coming months, what does it all mean for Irish tourism?
There is no doubt that visitor arrivals have already been affected. 2010 had not got off to a good start, with arrivals down on the previous year in each of the first 3 months. With fewer visitors arriving in April and the likelihood of lower passengers numbers in May, the prospect of achieving growth in 2010, an already challenging, if not over optimistic, target set by Tourism Ireland, must be becoming less of reality.
While there is no definitive evidence of the impacts, other than fewer arrivals by air, in part compensated for by an increase in ferry passengers, anecdotal reports would suggest that the primary threat to the season ahead is that of uncertainty. Tourism industry sources report a marked slowing down in the level of new bookings, understandably as consumers hold off making a decision waiting to see how likely it is that they will be able to fly.
The Customer Care Charter, announced by Minister Mary Hannifin last week and signed up to by over 600 accommodation providers, will somewhat help ease consumer concerns.
The new norm for 2010 appears to be business, leisure and VFR travellers either deferring travel or at least holding off making bookings until closer to the date of travel. So an even later booking pattern is expected to emerge.
Ferry companies should continue to see a rise in demand as travellers make alternative travel plans. ‘It’s an ill wind....’ the exposure of increasing numbers of passengers to the modern day ferry experience should expand the market for surface travel at least over the short to medium term.
The consumer protection offered by the package holiday should give a boost to tour operators, removing as it does some of the concerns about being stranded.
However, despite some positives and market share shifts, the situation is serious as the continuing threat of disruption undermines consumer confidence at a time of an already depressed demand for travel. The cost to the airlines is significant and will see several carriers already struggling, slip deeper into the red, an outcome which see airfares rise and will accelerate the consolidation within the European airline sector, with some casualties along the way.
The fall off in visitors and the loss of revenue will severely challenge a range of transport, hospitality and tourism business with many already in survival mode due to the recession. The outcome could see some business failures and more redundancies across the sector.
However, the tourism industry has proved itself in the past to be resilient and capable of speedy recovery. The sector has weathered setbacks, including foot & mouth, 9/11, and disruptions due to strikes. While the anticipated growth recovery in visitor numbers is unlikely to be achieved this year, the recovery is only postponed. On a positive note the outflow of cash spent by Irish residents travelling abroad will be slowed with the distinct possibility that some of those euros will be spent on domestic travel to the benefit of the industry and the exchequer.
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