Cloud of uncertainty lifts as Etihad resumes full service

The carrier says the flight ban over drifting volcanic ash cost company $30m.

Etihad Airways expects its entire global network to be operating normally before tomorrow following a six-day ban on flights over most of Europe that is estimated to cost the airline more than US$30 million (Dh110.1m). Extra costs and lost revenues related to the volcanic eruption in Iceland were running in excess of $5m a day for the Abu Dhabi carrier, according to James Hogan, the company's chief executive.

"It was uncharted territory," Mr Hogan said. "We are still counting up the costs." Etihad said it would operate 31 flights in and out of Europe yesterday as European authorities cleared airlines to fly in the last sections of airspace that had been closed because of the drifting cloud of ash from the eruption. Reopening European skies is important for Etihad as flights to and from the continent constitute 40 per cent of its business.

"As of now, everything is open," said Richard Hill, the chief operations officer at Etihad. "We believe we will be back to normal by the end of [today]." Etihad flies to 11 destinations in Europe, and the crisis resulted in the airline putting up 2,500 customers in 16 hotels across Abu Dhabi. On Tuesday, Etihad restarted its scheduled services to London, Paris, Brussels, and Geneva. Throughout the temporary European ban, its flights to Moscow, Istanbul, Cyprus and Athens were unaffected.

The International Air Transport Association (IATA) estimated that the Icelandic volcano eruption cost airlines around the world more than $1.7 billion in lost revenue up to Tuesday. For a three-day period when disruptions were at their height, lost revenue reached $400m a day. During the flight ban, Emirates estimated its costs to be at $50m and rising. It was forced to ground 30 aircraft to wait out the ash cloud, which could have caused engine damage and even failure.

"It is hitting hardest where the carriers are in the most difficult financial situation. Europe's carriers were already expected to lose $2.2bn this year - the largest in the industry," said Giovanni Bisignani the director general and chief executive of IATA. As EUROCONTROL, the agency that manages regional air traffic, and individual nations lifted the airspace ban, Etihad said it believes the crisis resulted in 123 cancelled flights and affected 22,000 passengers.

It was unable to fulfil almost 700 tonnes of air-cargo orders, while 10 per cent of its fleet, or five aircraft, was grounded at Munich, Paris and Rome. Its response strategy was aided by a new network operations centre and crisis management facility opened at its headquarters last May. The last times such large areas of airspace were closed was during the 2003 SARS health scare in Asia and immediately after the events of September 11 in New York in 2001.

"September 11 was a couple of days, but it was nothing like this," said Chris Youlten, the vice president of airport and network operations at Etihad. The most challenging aspect of the disruption caused by the volcano, Mr Youlten said, was the "highly variable nature of the situation - it was open to interpretation where the cloud was moving". [e-mail]