Will Iceland's volcano sink the EU's economies?

[turbo]

Much of the commerce in Europe is conducted via air freight, and I read in a news article today that collectively, passenger airlines are losing >$200M/day as long as European air-space is closed by volcanic ash. With all the ripple-effects that can result from this disruption of travel and commerce, will European economies be badly damaged? Europe has rail systems far superior to what we have in the US, but do they have the capacity and infrastructure to pick up all the slack?

Italian producers of buffalo mozzarella (a highly perishable product) are scrambling. Do they dump the milk or attempt to find alternative means to distribute their product?

There is no way of knowing how long the current eruption will last and at what rate. Even more sobering was finding out that the 1821 eruption of this same volcano lasted over a year.

 

[Jonathan Scott]

The wind direction is much more important than the duration of the eruption.

The normal prevailing wind in the UK is from the south west, which would blow the ash well away from the UK and to the north of most of Europe. We just happen to be having a spell of stable high pressure where the wind is mostly circulating the other way, across from Iceland, down the North Sea and across Europe. It brings sunny calm weather which is very pleasant, but has the unfortunate side-effect of pushing the ash in the wrong direction.

 

[turbo]

The wind direction is much more important than the duration of the eruption.

The normal prevailing wind in the UK is from the south west, which would blow the ash well away from the UK and to the north of most of Europe. We just happen to be having a spell of stable high pressure where the wind is mostly circulating the other way, across from Iceland, down the North Sea and across Europe. It brings sunny calm weather which is very pleasant, but has the unfortunate side-effect of pushing the ash in the wrong direction.

Ah! So if the eruption continues, we'll be looking at possible periodic disruptions in travel and commerce based on the vagueries of the weather.

Maybe we'll get lucky and Katla will stay quiet this time. It's supposedly overdue.

 

[Jonathan Scott]

Even if the volcano continues erupting and the wind direction keeps blowing towards Europe, it seems that we may be OK soon anyway.

The very fine ash and the height of the eruption are both thought to be due to the fact that the eruption has been occurring under water, because of a large volume of melted ice in the caldera. The coldness of the water shatters the rock very finely, and the heat of the rock creates huge steam pressure, lifting the ash up very high. It is hoped that when it runs out of water (which could already be happening now) the eruption will produce a much coarser type of ash which will not rise anything like as high and will fall back down much more quickly.

 

[turbo]

That would be welcome news, Jon!

 

[mgb_phys]

Much of the commerce in Europe is conducted via air freight

Don't think it's that much.
The three big hubs Heathrow/Schipol/Frankfurt handle 1M tons each/year - most of that is international (DVDs from Amazon)
Rail freight in europe is about 1000tons/PERSON/year (although a lot of that is probably coal to power stations) - even fruit from spain and flowers from Holland are trucked to the UK daily.

Italian producers of buffalo mozzarella (a highly perishable product) are scrambling. Do they dump the milk or attempt to find alternative means to distribute their product?

Typical Eu farmer solution would be to truck it to customers claim they destroyed and put it a subsidy demand for twice their normal sales.

 

[Borek]

passenger airlines are losing >$200M/day

That's what they claim.

The three big hubs Heathrow/Schipol/Frankfurt handle 1M tons each/year - most of that is international (DVDs from Amazon)

Nah, international DVDs won't play in EU players.

 

[turbo]

Don't think it's that much.
The three big hubs Heathrow/Schipol/Frankfurt handle 1M tons each/year - most of that is international (DVDs from Amazon)

There were news stories on TV in the last few days, tracking the plight of some importers of tropical fruits and vegetables and flowers. One fellow imports lots of tropical fruits and he employs hundreds of people (IIR) in GB and thousands of people in Africa, and the closures shut down his business completely. As of news-time, he had been without cash-flow for 5 days and was exploring his options. I don't believe rail freight from Africa to GB was one of them.

 

[russ_watters]

Nah, international DVDs won't play in EU players.

I bought a DVD of a good Irish comic on Amazon without checking and much to my surprise it wouldn't play in my American DVD player. I have no idea what route it took to get here...

...but I'm blaming PF because I first heard/of him here.

 

[mgb_phys]

Nah, international DVDs won't play in EU players.

The famous dvd gift-gate http://www.telegraph.co.uk/news/new...n-Brown-is-frustrated-by-Psycho-in-No-10.html

 

[BobG]

I don't think air travel will be disrupted enough to sink the EU economy. It will hurt it. If traffic disruptions happen sporadically, it will cause higher prices, hurt businesses, etc. But at least freight businesses will make rational decisions about how to handle the problem.

The affect on tourism could be worse, just from this one event. I think many people will rethink plans on traveling to Northern Europe at least this year. That's one reason that how businesses handle this crisis is critical.

European hotels have gotten an unfair rap about prices they've charged stranded customers. Many of the reports of jacking up prices are comparing very good bargain prices to the standard rates (which, to be honest, isn't charged all that often unless there's some special event going on in a city). None the less, there's a distinct likelihood of having to pay %150 to double the rate of travellers' original reservations or worse. This in spite of the fact that hotels are probably suffering as many cancellations as they are extra customers.

The typical example is the http://news.yahoo.com/s/ap/20100420/ap_on_re_as/volcano_travelers__wallets hotel in Sydney. The standard rate is $350 a night, but the most likely rate is usually around $250 a night. The Jackmans had a very good bargain at only $138 night, and the bargain price was compared to the standard rate for the article. Fair reporting or not, that sort of story has an impact.

Same thing for passengers with canceled flights. With flights so heavily booked nowadays, passengers could wait for weeks to get on a flight with their original ticket, or opt for a refund and purchase a new ticket at the standard no-notice rate (i.e. the cost of a new ticket is probably a lot more than the refund they'll get for the old). The idea of continuing to sell tickets to new customers when they have a backlog of stranded customers isn't going to win airlines any fans.

It may not be out and out price gouging, but businesses aren't doing themselves any favors if this even has the possibility to turn into a sporadic problem for a year or more.