22 Apr 2010

Volcanic eruption cost Air NZ $2.5m

7:35 pm on 22 April 2010

Air New Zealand says it lost about $2.5 million during the five days it was kept out of Europe due to an ash cloud from a volcano erupting in Iceland.

European air space was closed because of fears the ash would damage planes.

The money was spent busing stranded passengers in some cases and accommodating them in others.

Air New Zealand international group general manager Ed Sims told Morning Report the airline is trying to move stranded passengers as quickly and as fairly as possible.

Hundreds of Air New Zealand passengers stranded in Los Angeles and Hong Kong have now arrived in London.

Mr Sims says they landed at Heathrow overnight and were apparently elated to be home. However, it could take two weeks to clear the massive backlog of passengers.

On Wednesday, Air New Zealand put on seven additional flights to and from Heathrow over the next 24 hours.

Mr Sims says there have been significant challenges in negotiating landing slots for extra planes but the authorities at Heathrow have been extremely amenable.

He says people with a firm ticket booking will get a seat from now, and the airline will try to move stranded passengers in chronological order from their original point of delay.

House of Travel says it will take until at least next week to clear the backlog of passengers whose travel plans have been disrupted. The agency says it has about 4500 customers effected by the closure in Europe.

Head of retail operations Brent Thomas told Morning Report it will be early next week before the backlog of passengers is cleared. He says staff will continue to work overtime to find ways to help them get to their destinations.

Qantas, Singapore Airlines and British Airlines have also resumed flights to London. However, no Qantas flights have left London yet.

Business view

Business New Zealand says the flight ban over Europe has been severely disruptive, but the financial cost to most companies in New Zealand is unlikely to be high.

Chief executive Phil O'Reilly says companies will be relieved the ban has been lifted.

Qantas says the disruptions cost it $A1.5 million Australian per day, but it does not expect earnings to suffer.