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Ash clouds blacken Aussie tourism woes

23 june 2011, 10:47
Cyclones, floods, earthquakes and now an ash-spewing volcano have come at a high price for Australia's aviation and tourism industries, which analysts say are losing tens of millions of dollars a day, AFP reports.

Already struggling with surging fuel costs and a mining-driven rally in the Australian dollar that has seen an exodus of holidaymakers offshore, tourism and travel operators could little afford this year's string of disasters.

The ash cloud from Chile's Puyehue volcano grounded hundreds of domestic and international flights in Australia this week, the second major disruption due to the plume.

Sydney, the nation's biggest airport, all but shut down for some 24 hours, and flights from Asia and Europe had to be diverted to Brisbane, stranding thousands of passengers and leaving airlines with a hefty bill.

"This will be having a very major effect (and) not only on the airlines," aviation analyst Neil Hansford told AFP.

"All they're going to save by not flying is the fuel, the payments for air traffic fees, some airport charges... but they can only get rid of up to 20 percent of their costs; 80 percent of their costs sit there whether they fly or not.

"The industry could be losing in excess of Aus$30 million (US$32 million) a day."

Hansford, chairman of consultancy Strategic Aviation Solutions, said the latest flight chaos would have a particularly hard impact because it came mid-week, impacting business travel.

"You take taxis, then you've got to take hotels, restaurants... because this is right in the heart of the business week," he said.

Airports, which mainly profited from parking, would also see significant one-off losses from the upheaval, which affected most of the nation's major terminals, he added.

Australian flag carrier Qantas on Wednesday said the ash had cost $21 million before this week's chaos, on top of $185 million in losses following earthquakes in Japan and New Zealand and local flooding and cyclones.

Qantas chief Alan Joyce said the airline's international arm would run at a $200 million loss this year, with "a weaker result expected next year" as historically high fuel prices hammered the aviation industry.

The "Flying Kangaroo" cancelled aircraft orders and trimmed its growth targets last week, citing slow domestic conditions, just months after announcing it would slash capacity and jobs in a bid to cut costs.

John Lee, head of the Tourism and Transport Forum, said the ash plume was the biggest disruption to Australian aviation since a prolonged pilots' strike in 1989.

"We anticipate the total impact to the tourism industry will be something over $10 million -- it could be as high as $13 million or $14 million but it is probably around $11.5 million per day," he said.

Lee said it had been a horror year for the tourism and travel sector, with the constant natural disasters rattling confidence.

"The start of the year it was floods, it was Cyclone Yasi ... our biggest inbound market New Zealand impacted by earthquake in Christchurch, then the third event with the tsunami in Japan -- again one of our top five inbound markets," he said.

"We seem to have constant shock syndrome happening in the tourism industry at the moment."

Australia's dollar, currently trading around US$1.06, contributed to a 29 percent surge in outbound travel in April compared with the same period last year, with 1.4 million more people leaving than arriving in the past 12 months.

International tourists were also spending 20 percent less than two years ago, Lee said, with economic problems in top markets Britain and the United States and disasters befalling Japan and New Zealand.

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