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Tuesday 20 April, 2010

Good morning

Some thoughts about the flight disruptions in Europe. 

As feared in last week's newsletter, the problems are proving to be extended, and each day's optimistic projection for flights the next day have, so far, failed to materialize.

It goes without saying that the impacts on people and commerce are enormous.  Depending on whether you choose to count only stranded passengers unable to return, or whether you include also people unable to start their journey and people unable to continue their journey, there are easily more than 1 million people affected. And let's not forget about air freight.  Although airfreight typically comprises only 1% by volume/weight of all goods shipped, it represents 25% in value of all consignments.  Particularly in Britain, problems may soon start looming in terms of some food and medication shortages.

And what about the airlines?  Everyone has a different opinion about the financial impact on the airlines, with widely varying estimates as to how much money airlines are losing each day.

In actual fact, airlines may not be losing as much money as first seems likely. The greatest part of an airline's costs relate to actual flying operations - crew wages, jet fuel, and aircraft maintenance.  While of course, with no flights, airlines are earning no revenue, their outgoings are much less than if they were flying normal operations.

However, it seems probable that, industrywide, the airlines are losing in the order of $100 million every day - over half a billion dollars already.  As far as I can tell, no airlines have insurance to protect them against this type of risk.

And so, there has been a predictable rush to demand compensation by the airlines.  But, because the volcano in Iceland is unable to pay, they have turned instead to a usually reliable source - the governments in the affected countries.  Interestingly, one airline is not seeking any compensation at all.  Ryanair.  The usually hot tempered and irascible Michael O'Leary, CEO of Ryanair, has been amazingly patient and understanding.  He is not pressuring any government to allow his airline to start flying again, and Ryanair has said they neither seek nor expect compensation for something over which the governments have no control.

But do the governments have control?  No, of course they cannot control the volcano, its ash, or where it goes.  But, they definitely do control the decisions to close their respective national air spaces.  In this respect, the EU and UK are different to the US.  In Europe, it is the governments that decide if airlines can fly or not.  In the US, our government trusts the airlines to make the right decision themselves.

While no one thought to question the flight bans on the first day or two, many airlines (and very definitely, their would-be passengers too) are now becoming rather impatient.  As we all start to better understand what is occurring up in the air, the issue of if planes can and should fly or not is far from black and white.

Surprisingly, no one seems to know much at all about how much ash is actually up in the air.  No-one knows either how much ash is coming out of the volcano, how rapidly it is dropping down to the ground again, or exactly where and how it is dispersed.  The underlying weather reports give no information about the density of the ash, they merely report if there may be ash or not.

Furthermore, no one seems to know much at all about how much ash is too much ash from the perspective of engine damage.  But the EU governments - until Monday, at least, have maintained a zero tolerance policy when it comes to ash.

A number of airlines have now conducted test flights into the ash clouds. The most high-profile of these was a British Airways 747 flight on which their CEO, Willie Walsh, was a passenger as a very public expression of personal confidence in the safety of flying through the ash.  If the airlines are to be believed, all of these test flights have been conducted safely with no resulting engine damage detected.  The airlines are quite reasonably saying that if the reality of flying through the ash shows no damage, surely this trumps the very sketchy theory, and so are seeking permission to resume some, maybe even most, of their normal operations.

A group of European transport ministers met by video conference on Monday.  The outcome of their meeting is a reclassification of ash zones.  Some air space remains off limits to all flights.  Some ash free air space will now be opened up for normal operations.  And some remaining space will allow limited operations, with a requirement for the airplanes and their engines to be carefully inspected after flying through the space, before they fly again.

This should increase the amount of European airspace and a number of airports open for flights.

Meanwhile, the volcano refuses to cooperate.  The latest projections for Tuesday flights have had to be cut back due to yet another apparent increase in ash emissions.  The ash cloud continues to spread out from Iceland in a south and easterly direction.  However, the ash is spreading far and wide; so much so, that some flights in eastern Canada were canceled on Monday.

So what can we expect?  Your guess is as good as mine.  For now, if you had been planning to fly to, in, or from Europe in the next week or so, you would be very well advised to consider changing your plans.  All airlines have varying types of no fee change or cancel policies in place at present.  I imagine that contacting most airlines at present may be very difficult.  If you booked through a travel agent, then almost certainly they will be able to help you.

This also highlights another consideration.  Do you have trip insurance?  And, if you do, does it cover such risks?  And, if it does, what is the limit of reimbursement they will provide?

Let's not overplay this incident though.  Delays of this duration and extent are mercifully a far from a regular occurrence.  But until we have an accurate feeling about the future of this volcano, appropriate cover is something to consider when choosing a trip insurance policy.

You can find out more about trip insurance, and also access two excellent trip insurance comparison services, in the multipart series I wrote on the topic here.

There some useful resources about the volcano and its ash cloud available at the British weather office website.

That's all for now, folks.  But I wonder if you notice anything different, stylistically, about this short newsletter?  Rather than typing it as would be my first preference, I have dictated it using the Dragon NaturallySpeaking software. I am not doing this by choice.  It seems I may be an unfortunate victim of Carpal Tunnel Syndrome, and so, for now, I am attempting to minimize my keyboarding.

Alas, I was and still hope to be an extremely fast touch typist, and so this dictation system is frustratingly slow.  It also requires a very different thought process; when typing, the words flow naturally from my brain to the computer without conscious thought inbetween, rather like the way one walks to an objective . But now, I need to all the time be hawkishly monitoring the occasional wild and weird mistakes of the voice recognition software, and any attempt at an unbroken train of thought gets completely destroyed.

Stay tuned for the regular newsletter on Friday, and until then, please enjoy safe travels

David M Rowell aka The Travel Insider

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