BackDay 5 of volcano disruption: industry impact
Day 5 of volcano disruption: industry impact
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Airline industry group Iata called for steps to reopen European airspace, shut down by a volcanic ash cloud as the disruption entered a fifth day.
Below are some of the impacts on industries ranging from fashion and fish to car rentals to electronics.
Food/Restaurants
The world’s largest fish farmer, Norway’s Marine Harvest, said it would reduce salmon harvest volumes from Monday and that salmon exports to Asia, North America had been hit.
Iceland’s trade council said some fresh fish supplies were now being fed into frozen fish supplies, but most of Iceland’s fish exports are sea-based and so unaffected.
US grocer Whole Foods Market Inc said its stores on the east coast could see tighter supplies of fresh Atlantic salmon, which is sourced for those stores from Scotland.
Peter Grundhoefer, a top produce wholesaler in Frankfurt, said: “This affects all of us in the fruits business. We will lack beans and chilli peppers from Egypt and fresh herbs from Israel ... (and) exotic fruits like mango, kumquats and physalis (cape gooseberry) once stocks have been used up in the next one or two days."
Thomas Kosmidis, a manager at Frankfurt restaurant supplier Venos, said: “We are running short of tuna from the Indian Ocean, Victoria perch from Africa, basil from Cyprus and other fresh herbs from Israel; lobster from Canada and green asparagus from California."
Barbara Hennings, who works at Frankfurt sushi restaurant Iroha, said exotic vegetables were a bigger problem than fish.
“So far we’re not experiencing any supply bottlenecks and we’re not having to take dishes off the menu."
She said tuna was delivered frozen once a month from Spain so there was no impact there.
Kenya’s horticulture industry is losing $3 million a day and it will take several weeks to recover even if flights resume now, its association of exporters said.
Belgian discount supermarket chain Colruyt said sales of cut flowers such as roses from Kenya and fresh fish from Iceland came to a standstill on Saturday.
Retail
IKEA AB only transports its goods by ship, rail and truck, so the Swedish furniture retailer is not experiencing any supply disruptions.
“The impact we are feeling is our co-workers who can not get home now from meetings in Europe," a US spokeswoman said.
German fashion brand Hugo Boss AG expects a delay in showing its pre-spring collection to retailers such as Macy’s Inc and Nordstrom Inc, but a US spokesman said there would be no impact on stores since those clothes would not actually ship until the 2010 holiday season.
Logistics
Dutch mail group TNT NV said it had switched to road transport in Europe and was incurring higher costs.
Anita Gupta, Asia Pacific spokeswoman for rival DHL in Singapore, said the group had “increased its trucking capacity to minimize delays for shipments within Europe. A three to five day delay is expected for shipments moving between Europe and the rest of the world."
Teleconferencing
Cisco Systems Inc said companies were turning to video conferencing to connect executives stranded by the flight ban in parts of Europe.
“The only evidence is anecdotal, but you will not get a demo room in any of the Cisco facilities," said Fredrik Halvorsen, former CEO of Tandberg and head of the group’s TelePresence Technology Group. “We have seen a huge spike in usage."
Hotels/Tourism/Car rental
“Many hotels have been booked out since Friday," said Petra Winter, a spokeswoman for the Frankfort tourism office. Of 140 hotels with more than 34,000 beds in Frankfurt, only 20 still have vacancies.
Guests stranded at Marriott International Inc’s Grosvenor House, one of Europe’s largest hotels, are being treated to movie night & free cleaning of under-garments, according to the hotel chain’s Twitter feed.
Car rental companies are seeing a surge in demand as travellers try to find substitutes for flights.
“We are buying new cars for this" by taking on sooner than planned deliveries of cars the company already agreed to buy, a spokeswoman for Europcar in Hamburg said.
Rival Sixt AG is growing its fleet by keeping cars longer than the usual six months and recovering vehicles already moved to used-car dealerships.
Electronics
Japans’s Fujitsu Ltd said its notebook PC shipments to Europe have been halted temporarily due to the disruptions. It said there was enough inventory in the region to ensure there would be no impact on earnings at the moment. Sony Corp, Sharp Corp, Hitachi Ltd and Panasonic Corp said they were experiencing no impact.
In Seoul, Kim Seong-bong, a market analyst at Samsung Securities, said: “If the stoppage of flight services in Europe ... lasts more than a couple of weeks, it will be negative to technology exporters."
Airlines/Air traffic control
Giovanni Bisignani, head of the International Air Transport Association (Iata), estimated airline revenue losses were now reaching $250 million a day, up from an earlier estimate on Friday of $200 million.
Iata said the economic impact on airlines would be greater than the 11 September 2001 attacks.
The global Civil Air Navigation Services Organisation (CANSO) said the air traffic control sector was losing up to €25 million ($35 million) a day due to the closure of European airspace and warned of a significant impact on future investments.
Some airlines in Europe are not going to be in business in the next week or two due to the volcanic ash cloud that has affected air travel, the Association of European Airlines said.
British airlines and travel companies are losing tens of millions of pounds a day, increasing pressure on officials to give the all-clear to fly again.
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