Tuesday, December 21, 2010

Europe weather ruins Christmas for airlines, retailers

Europe weather ruins Christmas for airlines, retailers LONDON: Snow and freezing temperatures grounded flights across northern Europe on Tuesday, while retailers fretted they would struggle to make up sales lost due to bad weather with just four shopping days to Christmas.

Eurocontrol, the umbrella group for air-traffic control across 38 countries, said more services would likely operate on Tuesday after more than 22,000 flights across Europe were cancelled on Monday.

But cancellations remained widespread.

British Airways said it expected to make a "significant number of cancellations" to its shorthaul services from London's Heathrow airport.

"Severe weather continues to cause significant disruption to our operation and will do so in the run up to Christmas," the airline warned.

Analysts believe the freezing conditions will hit BA's profit by around 10 million pounds ($15.55 million) a day.

Shares in BA were 1 percent up at 268 pence by 1022 GMT, in line with the FTSE100 bluechip index, up 0.78 percent.

BAA, the company owned by Spain's Ferrovial which operates Heathrow, said its south runway would remain closed again on Tuesday, meaning the world's busiest international airport would operate at significantly reduced capacity.

Thousands of passengers have been stranded at Heathrow for days as flights have been delayed and cancelled.

The British government has relaxed regulations on night flights at Heathrow, allowing for arrivals until 0100 GMT each day until Christmas.

London's Gatwick Airport re-opened at 0600 GMT after closing overnight.

Flights to and from Frankfurt airport, continental Europe's biggest, also resumed after the airport had been shut for several hours in the morning, operator Fraport said.

"It is our goal to return to normal flight operations as quickly as possible," said a Fraport spokesman.

In Belgium, handling agents at its main airport managed to get hold of de-icing fluid after saying on Monday they might run out, allowing the departure of some planes on Tuesday.

Britain's Met Office has issued severe weather warnings for most of the country for the remainder of the week.

Eurostar said it was running a restricted service due to the bad weather. Big queues of Eurostar passengers were building up at King's Cross St Pancras station in central London.

"We are asking all customers booked to travel before Christmas to refund or exchange their tickets free of charge, if their travel is not essential," the cross-channel operator said.

With most festive shopping done in the two weeks before Christmas, European retailers are worried they are running out of time to make up lost ground.

"The snow across the country (UK) is having a dramatic impact, with sales running as much as down 50 percent in heavily affected areas," said Andrew Wade, analyst at Numis Securities.

With no let-up in the extreme weather in sight pre-Christmas profit warnings from retailers have already started.

Alexon, the womenswear retailer with 990 outlets in the UK and Europe, warned its sales had slumped 20 percent over the last three weeks, sending its shares down a fifth.


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