Threats of lawsuits, plunging share-prices, and lost jobs.
The ash cloud from Iceland’s Eyjafjallajökull volcano currently affecting parts of Norway could have consequences reaching far beyond those of just delayed passengers.
“I fear a bad beginning to the trading week will spread uncertainty,” Torbjørn Kjus, an oil market analyst at DnB Nor Markets tells Dagens Næringsliv (DN).
Kjus believes the daily use of jet fuel has fallen by approximately one million barrels worldwide. He suspects a week’s decline in demand will affect the markets, prompting a sell-off similar to Friday’s, when North Sea oil fell to under 86 dollars a barrel.
Jet fuel only accounts for roughly seven percent of the world’s oil consumption, but Kjus fears the market could react to reduced demand. There are also fears and doubts as to how long the situation will last.
“A prolonged period could influence the entire market economy,” he says.
The hotel industry has already been affected. According to DN, the big chains have already warned of staff cuts due to declining numbers of hotel guests.
Torgeir Silseth, group managing director of the Choice chain, says they’ve decided to issue conditional layoff notices to all of their employees should the trend last.
Their business hotels in Oslo, Stockholm, and Copenhagen are particularly vulnerable.
“I believe we’ll see a 20 to 30 percent fall off compared to normal levels. But it could deteriorate. Numbers of conference cancellations will be considerable, and the business travel market will dry up quickly,” though he doesn’t believe this will lead to any hotel closures short-term.
ATA (the International Air Travel Association) estimates carriers’ loss of income to be 1.2 billion kroner daily.
Robin Kamark, SAS’ Commercial Director, says a possible long-term situation means bad news for them.
The airline is faced with refunding all ticket and travel-related costs. An EU directive prevents carriers waiving financial responsibility because of force majeure.
“Airlines run an unlimited risk. The insurance industry can invoke force majeure after the volcanic eruption, but we can’t. It’s absurd,” he says.
Meanwhile, Sverre Quale, head of the airports authority Avinor, says they’re expecting insurance and compensation-related lawsuits because of the recent Norwegian airspace closures.
“There’ll soon be talk of bankruptcies if the situation lasts for weeks,” he says.
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