Worst case: Months of airline disruptions from ash, lives on hold, economic catastropheBy Arthur Max, AP
Tuesday, April 20, 2010
Restless volcano may upset Europe for months
AMSTERDAM — Even as Europe’s dormant airports sputter back to life, prudent travelers should ask: What if it happens again?
Because it might. Over and over again, for weeks, perhaps months, scientists say.
The last eruption from Iceland’s Eyjafjallajoekull, in 1821, lasted off and on for 13 months — but back then there were no jet engines to get clogged up from volcanic residue.
What should the world brace for if ash clouds wash over European skies intermittently for six months or a year, repeatedly closing airports with just a few hours warning?
The crucial tourist industry will be devastated. Supermarkets will have less out-of-season produce. Businesses, like delivery services, will need to improvise. And everything will be more expensive.
Europe’s recovery from the economic recession likely will be set back to zero. Banks and governments, worried about runaway inflation, may tighten credit. Railways and roads will be overloaded with freight and people opting for more reliable means of travel.
Five days into the crisis, a BMW plant in Germany and a Nissan plant in Japan were forced to close temporarily because the ash cloud prevented the arrival of parts shipments. Prolonged disruptions to supply chains could have a profound effect on manufacturing and global trade.
The psychological effects of uncertainty could be numbing. As long as the volcano keeps rumbling, few people are likely to willingly risk more nightmarish delays camped out at airports or trapped in overpriced hotels.
Some people may feel more isolated, unable to escape on a cheap last-minute air ticket. They may think twice about visiting Grandma if it means six hours on a train rather than one hour in the sky. And booking a seat on the intercity express may be a lot harder.
Optimists will see benefits in a slower pace of life and the excuse to pass up yet another business conference. Vacations will be closer to home. Certainly, people living under a flight path will enjoy the quiet and skies unmarred by contrails.
The climate, too, might benefit from the absence of polluting aircraft in the sky, though the cancellation of 100,000 or so flights would amount to just a blip on the rising graph of the world’s carbon emissions.
National railways are enjoying a boom. Extra trains are running from Moscow and Madrid and all points in between. Eurostar added 33 trains since the weekend carrying 165,000 passengers from Britain to the continent, or 50,000 more than usual.
Economically, however, the picture would be generally grim.
Travel and tourism account for up to 5 percent of Europe’s economic output. Even if the number of travelers drops by just one person in five, Europe can scrap its hoped-for return to growth this year, said economic analyst Vanessa Rossi.
The spin-off effects of a sharp drop in travel could wipe off one to two percent of GDP. “That basically means we’ve got a continued recession,” said Rossi, of Chatham House, a London research institute.
“If it persists, it’s quite chaotic. You find ways through it, but it’s going to be more costly,” she said. “This is absolutely bad news at the wrong time. But nobody chooses a volcano to erupt. So that’s it,” she said.
Simon Tilford, chief economist of the Center for European Reform, said it was too early to say the recovery would be severely undermined. Some sectors would suffer more than others, he said, but generally Europe would muddle through.
Airlines, still struggling to return to profits, will be the big losers. The International Air Transport Association calculated the airlines lost $200 million a day during the first five days of the volcanic crisis, and carriers are looking to their governments for support.
Tim Clark, president of the Dubai-based Emirates airlines, said the worldwide airline industry faced the threat of “implosion” if the crisis lasts too long. Without government help “there won’t be many carriers left. You simply can’t afford to shut down something the size of Europe,” he said, putting Emirates’ own losses at $10 million.
Countries like Greece and Portugal, already facing debt crises, are counting on their tourist industries to help them limp back to growth — plans that now could go seriously awry.
The ripple effect will spread around our interconnected globe.
Kenya, which exports 1,000 tons a day of fresh goods, has thrown away 10 million flowers — mostly roses — since the volcano eruption. Asparagus, broccoli and green beans meant for European dinner tables are being fed to Kenyan cattle because storage facilities are filled to capacity.
Pineapples are piling up with farmers in Ghana, since the airport has no refrigeration facilities to safely wait for a cargo flight.
European airports like Amsterdam’s Schiphol are major transit points for travel between Africa and North America, and from Asia westwards.
With more Europeans staying home and more business done by teleconference, the United States and the rest of the world will see a drop in travel revenue.
India’s imports of rough diamonds from Antwerp and London have been hit, denying raw material for its huge diamond polishing industry. Exports of the prepared industrial diamonds and jewelry back to Europe and the U.S. will suffer if flights remain halted, said Chandrakant Sanghvi, regional chairman of India’s Gem and Jewelry Export Promotion Council.
Other businesses said they are coping with interrupted air supplies, but they appeared not to have given much thought to long-term shutdowns of supply chains. In the first week of the emergency, the focus was on finding solutions to immediate problems rather than on structural changes.
“I would say it’s day-to-day,” Ford spokesman Todd Nissen said in Detroit. “There’s so many plants that could potentially be affected. … It’s such a complex system.”
With its 50 Europe-based planes grounded, DHL, the international delivery service, has engaged in creative routing, said Jorge Wiedemann from its corporate headquarters in Bonn, Germany. Air freight from the U.S. and other points were diverted to Spain, then put on a fleet of trucks. The centralized distribution system based in Leipzig was modified to add regional hubs, he said.
“We are dealing with it on a daily basis.” Wiedemann said “So far it’s going well and there is no major backlog. How long we can deal with a situation like that is something I can’t answer.”
Britain’s supermarket chain Waitrose also said the effect of closing the air lanes was minimal so far. “There are no gaping holes on the shelves,” said spokesman James Armstrong. He could not comment on the likely effects of repeated disruptions. “We are monitoring the situation,” he said.
Most of Europe’s food markets rely on local or European produce, especially during the summer, and nonperishable canned or packaged imports usually arrive by container ships.
But gourmands with a taste for papaya and exotic produce will have to go without, and menus in high-end restaurants and sushi bars may be red-inked with “unavailable.” One Boeing 747 with 110 tons of fish destined for Europe sat on the tarmac in the Middle East, among some 2,000 tons of other disrupted shipments.
Tilford put such breakdowns in the category of “inconveniences” rather than “an existential threat,” even under the worst-case scenario.
“There’s no doubt it would be very disruptive if it went on for that long. But I don’t believe, unless it was a complete blanket on civilian air travel, that the impact on the economy will be that grave.” he said.
“Europe is not a particularly trade-dependent economy,” said Tilford. Most traffic of goods is internal among the 27 members of the European Union.
“The longer it goes on, the more time we have to find alternative ways of doing things,” he said.
Associated Press Writer Ashok Sharma in New Delhi, Tom Krisher in Detroit, and Adam Schreck in Dubai contributed to this report.
Tags: Air Travel Disruptions, Amsterdam, Europe, Netherlands, North America, Recessions And Depressions, Transportation, United States, Volcanoes, Western Europe