Update: British Airways seeks volcano compensation

19th Apr 2010 09:36

Shares in travel stocks continued falling as they updated the market on expected losses from the cloud of volcano ash that is keeping flights grounded across Europe.Normal air traffic is expected to resume from seven o 'clock on Tuesday morning as airports in Scotland, Northern Ireland and the north of England open. British Airways said it estimates that lost passenger and freight revenue together with the costs incurred supporting passengers is about £15m to £20m a day.Chief executive Willie Walsh said that the airline and its European peers have asked the EU and national governments for financial compensation, as had happened in the aftermath of the September 11 terrorist attacks.Its budget peer easyJet says the cumulative profit impact up to today is around £40m, representing lost revenues and costs incurred as a result of the disruption.'The continuing daily profit impact is estimated to be around £5m,' it said.Travel agent TUI, the First Choice owner, said about 100,000 of its customers due to return home yesterday were left stranded by the flight ban imposed after the eruption of the volcano in Iceland last week.TUI estimates the cumulative cost to the group, up to and including yesterday, 18 April 2010, is about £20m. Estimated daily costs thereafter will run at about £5m to £6m, it adds."The welfare of our customers is paramount and the group is providing appropriate assistance to all those in resort whose return home has been delayed,' it said.'In the UK, of those customers who were due to go on holiday and whose flights have been cancelled, around 90% are choosing to re-book their holidays for a later date.'TUI's fellow travel group Thomas Cook said it estimates the daily impact of the disruption at around £7m. 'The group has substantial banking facilities and as at 31 March 2010 had headroom of around £400m under our committed banking facility,' it said.The International Air Transport Association (IATA) said the crisis is costing European airlines at least $200m a day and sharply criticised European governments.'In the face of such dire economic consequences, it is incredible that Europe's transport ministers have taken five days to organize a teleconference,' said Giovanni Bisignani, IATA's director general and chief executive.