Eyjafjallajokull. Now everyone knows that name. Airlines are losing money the longer their planes are left on the runways instead of flying around ferrying people. SIA might lose $10 million a day as it has about 25 flights to Europe daily. British Airways projects its daily loses as much higher and between £15 and 20 million a day, probably because it wants government aid and has to give a bleak outlook for the UK’s national carrier. In retrospect, the volcanic ash and not the recent strike was what grounded BA for impact. Qantas puts its loses as $1.4 million a day if we want to put another of SQ’s One World competitor’s daily costs of being grounded in context.
SIA supposedly has a first in first out backlog and priority is for those who had a minimum stranded period of 5 days. As they just raised airfares and thus customer ire or at least irritation, the question out there is how SIA is handling the matter like paying its crew now, settling and compensating the stranded and clearing the backlog later etc. I doubt SIA would be the first to rush to send people to Europe and a wait and see what BA does attitude is more likely for the heavyweight Singapore-Heathrow route.
Anyway, this whole episode sounds like karma on Europe particularly for not bailing out Iceland when they got hit by the financial crisis after the Lehman collapse.
SIA ‘will not fly if it is not safe’
Singapore carrier focusing on taking care of affected customers
by Zul Othman
05:55 AM Apr 20, 2010
SINGAPORE – Unlike its European counterparts, Singapore Airlines (SIA) has not conducted any test flights through the volcanic ash that has paralysed air travel in Europe.
But, as the pressure mounts on European governments to open airspace – amid mounting revenue losses for the airline industry – the Singapore carrier made this promise: It will not fly if it is not safe.
“Having the safety of our customers and crew as our No 1 priority means that we will not operate any aircraft unless there’s full assurance it’s safe to fly. This has been our policy all along, and we will not compromise this for anything,” SIA spokesman Nicholas Ionides told MediaCorp.
SIA is focused on managing the situation and taking care of affected customers said Mr Ionides.
SIA shares dropped 3.61 per cent on Monday, and a Bloomberg report estimates the disruptions have caused the carrier a net loss of about $3.7 million a day in its passenger and cargo business, and lost sales of about $7.6 million a day – probably the biggest loss among Asian carriers.
Seventeen flights out of Changi Airport were cancelled on Monday, but two of its flights to and from Greece were operated. Two flights on the Singapore-Milan-Barcelona route will also depart today.
SIA has not taken any fresh bookings to its affected European destinations since Friday.
Once flights can resume, SIA customers on the first flight that was cancelled to each destination will be given priority on the first available flight, followed by customers on the next cancelled flight and so on.
“We’re also trying our best to seek solutions … including considering mounting additional flights,” said Mr Ionides. “But the situation remains very fluid, so firm decisions cannot be made yet.”
Filed under: Transport