Devasating economic impact of Iceland volcano less for US airlines
The Icelandic volcano crisis has wreaked havoc on passengers and airports across Europe, and it may drive a few European airlines into bankruptcy. But analysts expect the crisis to cause far less economic damage to carriers in the US.
The International Air Transport Association said Wednesday that the ash crisis has led to the cancellation of 100,000 flights and cost the world’s airlines an estimated $1.7 billion.
Analysts say that European carriers will feel much of the impact as people rethink future travel plans.
Aviation analyst Michael Boyd estimates that US airlines, by comparison, have lost $100 million in revenue related to the crisis. He said the losses would not threaten the long-term health of the U.S. industry.
The crisis could, however, delay the modest recovery that airline officials had hoped for this year. Global airlines are expected to lose $2.8 billion in 2010, compared with $9.4 billion lost last year.
European airlines are cutting fares to boost demand. And George Hobica, founder of Airfarewatchdog.com, said he has spotted deals to some European cities in recent days.
"People are going to be a little wary about being stranded," he said. "There were so many images on television of people sleeping on airport floors for a week."
Robert Herbst, an industry analyst based in St. Louis, said the volcanic ash crisis has caused European airlines "drastic harm" and could push smaller carriers into bankruptcy. He said the crisis would have minimal impact on the US industry.
Herbst said uncertainty about the volcano could cause travelers from Asian countries to opt for summer vacations in the US, lifting demand for seats on American carriers.
He also said US travelers might decide to fly to domestic destinations or locations in the Caribbean.
By David Wilkening
David
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