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Economies suffer from flight restrictions


Economies suffer from flight restrictions


The economic impact of the flight restrictions because of the Islandic volcanic ash cloud has been massive.

Businesses that are dependent on fast air freight are suffering.

Worst hit have been those with perishable good like flowers and fish.

At Brussels airport, cargo manager described his stinky problem: “We have five tons of fish that’s stuck here. All this fish is going to have to be destroyed because it will be unfit for human consumption.”

Flower, fruit and vegetable exporters in places like Africa and Israel have been watching their products rot before their eyes.

Kenya, which accounts for about a third of flower imports into the European Union, is losing an estimated 1.5 million euros a day.

And in Israel flower exporter Haim Hadad said he had just had to condemn more blooms: “We opened part of the cargo of flowers, and we saw that the temperature is over 30 degrees which means that we have to destroy all the product. It’s a huge amount of money.”

Air freight operators have been looking at using southern European airports that are still open and then completing journeys by road.

The German economy minister Rainer Brüderle met with industrial leaders on Monday to talk about minimising damage to sectors beyond the airline and travel industries.

After the meeting he said: “It’s clear that if air traffic operations can’t function properly over a period of time, logistics firms will be disrupted and that will hit supplies and sales. That’s why I have ordered the setting up of a task force.”

If European airspace is closed for months, one economist estimated lost travel and tourism revenue alone could knock up to two percent off regional growth.

Another economist Marc Touati, with CEO Global Equities, explained: “If this goes on for a while, then there will be real economic consequences. Given that economic growth is already very weak right now in Europe, we don’t need that.”

Overall European growth had been forecast to be one to 1.5 percent this year. That means if the disruption continued for a while some countries would not experience any growth.

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