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Ragona, Maddalena; Hansstein, Francesca; Mazzocchi, Mario --- "The Financial Impact of the Volcanic Ash Crisis on the European Airline Industry" [2011] ELECD 911; in Alemanno, Alberto (ed), "Governing Disasters" (Edward Elgar Publishing, 2011)

Book Title: Governing Disasters

Editor(s): Alemanno, Alberto

Publisher: Edward Elgar Publishing

ISBN (hard cover): 9780857935724

Section: Chapter 3

Section Title: The Financial Impact of the Volcanic Ash Crisis on the European Airline Industry

Author(s): Ragona, Maddalena; Hansstein, Francesca; Mazzocchi, Mario

Number of pages: 22

Extract:

3. The financial impact of the volcanic
ash crisis on the European
airline industry1
Maddalena Ragona, Francesca Hansstein and
Mario Mazzocchi

3.1 INTRODUCTION
In April 2010, the European air traffic was heavily disrupted by the volcanic
ash cloud originated by the eruption of the Icelandic volcano Eyjafjalla-
jökull. Even if the explosion was of low intensity, it produced an enormous
cloud of ash moving through the European sky. The fact that the ash was
much finer than usual, moving quickly and possibly affecting aircraft
engines, led aviation authorities of concerned countries to declare most of
European skies no-fly zones (NFZs). On the basis of the information
immediately available, there were claims of huge economic impact on the
air travel industry, even bigger than the impact engendered by the US air
traffic halt following the terrorist attacks on 11 September 2001 (European
Commission, 2010).
It is obviously difficult to obtain accurate estimates of the overall
economic impact that can be ascribed to a natural disaster like this. Besides
the unpredictable behaviour of nature (in this case not only the eruption
but also weather conditions), one should consider the adaptive behaviour
of people, whose complexity increases with the number of actors involved,
each with different interests and motivations in managing the emergency
situation (Macrae, Chapter 2). For example, after five days of air disrup-
tions the relevant authorities raised the safety threshold at which flying was
admitted, a decision that is likely to have softened the potential impact
(Alemanno, ...