EU recommends plan to limit volcanic ash airline disruptions

24 May 2010 21:06  [Source: ICIS news]

HOUSTON (ICIS news)--European aviation officials on Monday recommended new approaches that they hoped would limit disruptions caused by the volcanic ash that stifled air travel and suppressed jet fuel prices.

The European Union (EU) - in association with Eurocontrol and the European Aviation Safety Agency (EASA) - made suggestions that would limit flight restrictions to prevent another widespread ban on airway traffic and the economic ills that ensued.

The ash cloud from Iceland’s Eyjafjallajokull volcano in mid-April caused a week-long flight ban, stranding millions of passengers as the plume passed over Europe.

More than 100,000 flights were cancelled through Europe, costing the air-transport industry between $1.87bn-$3.11bn (€1.5bn-€2.5bn), according to EU estimates.

“The multi-cancelling of flights cut back consumption [of jet fuel] on both sides of the ocean,” a US east coast jet fuel trader said.

As airports shut down and demand for jet fuel collapsed, prices fell below $2.00/gal for the first time in three months.

Airlines were flooded with excess product as air travel dwindled. Some companies went so far as to cancel deliveries of jet fuel, suppressing demand and causing prices to fall as low as $1.93/gal, according to data from global chemical market intelligence service ICIS pricing.

EASA produced new airspace charts to “help minimise airspace closures in the even of volcanic ash reaching Europe without compromising safety standards”, the agency said.

The organisations agreed to designate four air safety zones - each zone based on the levels of ash concentration – and to limit the no-fly zones.

In addition, the EU commission said it planned to set up a crisis cell for improved coordination in the case of extraordinary aviation events.

The US jet fuel trader said that with prices recently flat, airlines were storing every drop of jet fuel they could get before prices spike with the return of jet fuel demand.

Reporting by Sheena Martin

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