Delta, UPS bear brunt of business loss from volcano ash

The volcano ash that wafted across Europe has cast a cloud over some businesses with Atlanta ties.

Chief among them is Delta Air Lines, which could be losing more revenue than any other U.S. carrier, by some estimates. And shipping giant UPS, which delivers 2 million packages a day outside the U.S and has its main European air hub  in Cologne, Germany, has had to stop outbound shipments from Europe and could not say Monday when they will begin again.

As airlines prepared to resume more flights Tuesday, analyst Robert Herbst estimated Delta is losing $10.4 million in revenue daily, with a daily operating loss of $6.5 million after accounting for savings from unused fuel and other operating expenses -- the highest amount of the U.S. carriers.

The Boyd Group, an aviation consulting firm, estimated Delta lost $29.4 million in revenue through Sunday, also the highest among U.S. airlines.

Delta canceled 90 flights Monday and 39 flights for Tuesday. It said it would operate routes to Barcelona, Madrid, Rome, Athens and Istanbul Monday night, with extra flights to get passengers to their destinations. The carrier also expected to resume more flights Tuesday evening.

Still, the effect on U.S. airlines so far has been smaller than the effect of February snowstorms, and airlines may recover some revenue from business travelers rebooking later trips, according to J.P. Morgan analyst Jamie Baker.

The impact on some European carriers is much worse -- on par with the effects on air travel after 9/11. But, "for U.S. carriers it's equivalent to a several-day weather event at their major hub," according to airline consultant Bob Mann. "It's within the range of meteorological events that just happen."

"I don't think it'll affect the summer booking patterns," Mann said. "Having said that, it's a little like forecasting the weather."

Some UPS shipments to Europe have been routed to the airport in Madrid, Spain, which remains open, with the goods then being transported by truck. Some shipments from Asia are being sent to Istanbul, Turkey, whose airport also remains open.

UPS spokesman Norman Black said the company did not initially attempt to find alternative airports to ship out of Europe because first projections from aviation officials were that the airports would relatively quickly reopen.

"We're prepared to resume normal operations once we get the green light. We have aircraft and crews ready to go," he said Monday.

UPS is not giving a money back guarantee on delayed shipments because they don't apply when they are caused by an act of nature.

Donna Mullins, president of the Atlanta Air Cargo Association, said "There's a little bit of a backlog," on shipments out of Atlanta but added, "I wouldn't say it's completely devastating. Thank goodness that it's not China."

Lutz Gorgens, the german consul general in Atlanta, said the chief executives of 10 German companies held a regularly scheduled meeting Monday and, "The overwhelming feeling was that the impact on trans-Atlantic business in this region was minimal. To my surprise."

He said that's because the vast majority of freight between Germany and Georgia is sent by ship.

"What is affected is the dislocation of people," he said.

The Netherlands-American Chamber of Commerce of the Southeast U.S. was scheduled to host a dinner for a group of high-level Dutch corporate executives in Atlanta Monday in order to discuss business  opportunities in the area with them.

But the meeting was postponed, said Richard Sheinis, president of the group, because they could not get to Atlanta.

Jackie Yeaney, chief marketing officer for PGi, a global virtual meeting company based in Atlanta, said she's seen an increase in web conference traffic since the airport shutdown.