News analysis: effects of the volcanic eruption in Chile

In the same way that allies in a united cause have a mutually beneficial relationship, Australia’s tourism and aviation industries operate with a certain symbiosis. They complement each other nicely when things are going well, and look to one another to get back on their feet when things turn sour.

We first saw it in 1989 when the Australian Federation of Air Pilots (AFA) embarked on a crusade for better pay and work conditions for its pilots. Australia’s economy saw over a billion dollars leak from its coffers as one of the country’s most expensive and bitter industrial disputes unfolded. But no, the tourism industry didn’t come to a grinding halt. It emerged stronger than ever after ironing out the creases and forging a stronger bond with the aviation industry.

More than two decades on, and Australian tourism is again on the horns of a dilemma as one of the biggest events in recent aviation history unfolded earlier this month. But this time around, there was no dispute to resolve and no finger to point when a Chilean volcano sent an ash plume over eight kilometres into the global airspace.

What followed was utter chaos for the global tourism industry. Scores of international airports were forced to close and countless passengers were stranded as their flights were cancelled. Among them, at least 75,000 Australian travellers were displaced as the volcano polluted the Australian airspace for two weeks and forced the closure of Australia’s two main airports, Sydney and Melbourne, for the first time in history.

WRATH OF THE ASH

Like the 1989 dispute, the ash cloud came at a hefty cost for the tourism industry. Qantas estimated losses of around $21 million, while Virgin suffered “significant impacts” across its entire network. Tiger, Jetstar and Air New Zealand also tallied up a decent number of flight delays and cancellations, but are yet to put a figure to their losses.

With early estimates suggesting $16.5 million in losses to the tourism industry, Australian Federation of Travel Agents chief executive Jayson Westbury said that those who work in travel are facing one of the most difficult hurdles of all time. And with losses from business meetings, restaurant bookings, lost taxi trips and hotel reservations yet to emerge, Westbury feared the roll-on effects are yet to surface. “Think about it — if you consider all the losses the industry has had to deal with over the past few weeks, you’re counting up some pretty decent figures,” he said. “There’s no doubt the ash cloud will go down as one of the biggest events in aviation history.”

Likewise, Tourism and Transport Forum (TTF) chief executive, John Lee, agreed the industry will struggle to get on top of the events in the short term. But overall he remained optimistic about the situation. “Unlike the natural disasters we saw earlier in the year, we don’t need to convince travellers to come to Australia. They know the country is good for travel and will come when the aviation space returns to normal,” he said.

LOOKING TO THE BRIGHT SIDE

While many of the airlines and customers tend to their wounds as the ash cloud subsides, there are some unlikely winners who have benefited from the natural phenomena. Domestic rail and coach bookings experienced a spike as the airlines suffered. Australia’s interstate rail service, CountryLink, saw an 18% boost in reservations during the main period of airline cancellations, and had to put on hundreds of extra seats to keep up with increased demand.

On June 21 alone, when the ash plume was at its most ruinous, more than 22,000 customers visited the CountryLink website, marking an 186% increase on average daily visits. Many coach and ferry companies also saw increased bookings over the same period, along with some capital city CBD hotels, though this was offset by losses from cancelled bookings in some cases.

AN EYE TO THE FUTURE

Weeks after the initial eruption, Chilean and Argentine airlines were still struggling with grounded flights and cancellations, and the Australian Bureau of Meteorology was unable to confirm whether the cloud was gone for good.

Whatever the weather forecast holds, the TTF doesn’t expect it will take long for Australia’s tourism industry to recover, but Lee admitted it would take luck to turn things around. “The outlook is good, but things are still hanging in the balance at this stage. We need Mother Nature to help us out for things to recover.”

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