Air Restrictions Costing Millions

BAA, the operator of several major UK airports including Heathrow and Stansted has announced today that it is losing as much as £6m per day due to the air space closures caused by the volcanic ash cloud.

BAA operates six UK airports, have also said however, that they do not expect a ‘material impact’ on their finances as a result of the sudden unforeseen losses.

Furthermore, Aer Lingus, the Irish airline has said that the flight disruption is also having a large impact on their finances as they have already lost 15-20m Euros in the 5 days since the air space was closed.

On a positive note for the company, Aer Lingus added that it had "substantial cash reserves" and could "withstand a sustained closure of airspace".

Today has seen the start of a small recovery, as flights took off this morning from Glasgow and Edinburgh airports, this is the first movement of any kind at a BAA airport since midday on Thursday.

In a statement, BAA - which is owned by Spanish firm Ferrovial - said it was working with National Air Traffic Services, airlines, regulatory authorities and the government to ensure its airports were ready to reopen at short notice.

And it said that it should have enough money to cover the losses caused by the shutdown.

"BAA entered this period of flight suspensions with sufficient available funds to mitigate the closure of British air space for a considerable amount of time," the company said.

"Right now, we don't think the airports' closure will have a material impact on our regulated airports' abilities to finance their activities," it added.

British Airways have also released a statement saying it is affecting their cash flow even more, going to the lengths on Monday to ask the EU and UK government for financial compensation due to the closures.  They said that the inability to go ahead with flights is costing them as much as £20m a day.

Also on Monday, Europe's biggest travel operator, TUI Travel - the owner of Thomson and First Choice - said the disruption was costing it between £5m and £6m a day.  

Posted at 01:53PM Apr 20, 2010 by Marc Stenton in The Economy  |  Comments[0]