Airlines and hotels to lose millions as bookings fall
IRISH airlines and hotels, already reeling from the recession and unprecedented floods and snow earlier this year, are set to lose millions of euro as a result of a volcanic eruption in Iceland .
Around €120m was knocked off the value of Ryanair and Aer Lingus as investors fear the delays--and further possible delays today --will hit profits.
Ryanair closed down 1.9pc while Aer Lingus was down 2.7pc in Dublin.
The Dublin Chamber of Commerce said the immediate impact on its members had been largely one of inconvenience so far.
Spokesman Patrick King said some members have been postponing, until next week, meetings that would have required air travel yesterday and today.
"People are making other arrangements and while the airlines and the airport itself might take a financial hit, the ferry companies, for instance, are reporting a boost to their sales," said Mr Kingsaid.
Aer Lingus and Ryanair could lose anywhere up to €9m a day in revenue between them, depending on how many of their flights are cancelled because of the eruption. Ryanair cancelled some 40pc of its flights yesterday.
Based on their annual data, the average daily revenue for Aer Lingus is between €2.5m and €3m, while for Ryanair the figure is about €6m.
But despite the revenue losses, the two carriers save significant costs when their aircraft are grounded -- particularly fuel expenses.
Bloxham Stockbrokers analyst Joe Gill said that while a day, or possibly even two days, of grounded aircraft was not a major concern to investors, an extension of the current no-fly period could force some revisions to financial forecasts.
In March and April last year, Alaska Airlines was forced to cancel nearly 300 flights due to volcanic ash clouds produced by Mount Redoubt, 180km southwest of Anchorage.
The estimated cost to the aviation industry of major eruptions of the volcano between 1989 and 1990 was put at US$101m (€78m) and the overall cost to the local economy at US$160m.
Meanwhile, the Irish Continental Group reported an increase in bookings as passengers seek an alternative way to travel due to air travel disruption.
All Irish Ferries sailings are operating normally and space is available on all routes, the company said yesterday.