Airline stocks face a bumpy journey

Hotel News - 19/04/2010

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An industry that has only just begun to recover from the global economic downturn and painful increases in fuel costs is expected to come under renewed selling pressure this week, as airlines around the world start counting the painful cost of the biggest shutdown in European air travel since the World Trade Center attacks in 2001.

On Friday, the International Air Transport Association (IATA) said the travel suspensions cost the industry $200 million every day in lost revenue.

In addition to all that lost revenue, airlines also faced increased costs from areas such as caring for stranded passengers and re-routing aircraft.

The insurance most airlines have against crashes often does not cover the cost of business interruption. And, with the volcano set to continue erupting, those costs could continue to mount for several more days.

British Airways, forced to ground 245 planes, is thought to be losing $20 million every day.

Other northern European carriers, such as Finnair and Lufthansa, are similarly hard-hit.

Australian carrier Qantas is not thought to be suffering so badly, despite having two of its Boeing 747 airliners being parked at Heathrow.

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