Ash fallout costs local businesses millions

The cloud of volcanic ash hanging over northern Europe has cost the South African economy more than R100-million since the closure of most European airspace on Wednesday last week.

This is according to estimates from key players in export industries and the airline industry, which have been the most severely affected by the flight ban.

Association of South African Travel Agents board member Claude Vankeirsbilck estimated that revenue losses from cancelled flights leaving South Africa could amount to as much as R80-million.

Up to 20 passenger flights a day have been cancelled.

Flights resumed only on Wednesday.

SAA spokesperson Fani Zulu said that the airline could be losing as much as R14-million a day in revenue on its three European routes. But not all of this will translate into losses because of the subsequent reduced expenditure.

The South African flower export industry has also been hard hit, with an estimated R4,62-million lost since last Wednesday.

South African Chamber of Commerce and Industry spokesperson, Peggy Drodskie said that “the eruption comes at a time when South Africa’s recovery from the global downturn hinges on increased trade activity”.

Vankeirsbilck said South African travel agents, who book passengers on all airlines, will have to give customers full refunds on their tickets.

“The industry has probably had 40 or 50 flights out of South Africa cancelled,” said Vankeirsbilck.

“That’s 10 000 to 12 000 passengers that need to be refunded about R8 000 a ticket, on average.”

These estimates did not include the amount South African travel agents had lost in the past week because they were unable to sell holiday packages to Europe.

South African Flower Growers’ Association chairperson René Schoenmaker said that unlike other African flower exporters such as Kenya which sends 97% of its produce to Europe, South Africa depends on Europe for only 60% of its total exports.

The industry would try to offset its losses by selling its produce locally, or by diverting it to other international markets.

Schoenmaker admitted, however, that the volcanic eruption was an “unprecedented” event and that, as a flower exporter, he would be “glued to the news all week”.

Grindrod Logistics’ operations executive for the perishable division, Craig Campbell, said that a backlog of 40 to 50 tonnes of fresh-cut flowers, worth just under R1-million, had been sitting in his refrigerated transit sheds since last Wednesday.

“I had to call my customers on Sunday to tell them to hold off on all further deliveries,” said Campbell.
“We make money only if we ship cargo, in which case we have lost a week of income.

“I haven’t put the figures together yet [of how much we’ve lost]—I’m too scared to.”

Fresh Produce Exporters’ Forum chief executive Stuart Symington was more upbeat than his counterparts in the fresh flower export industry.

Less than 1% of South Africa’s fresh fruit exports—the highly perishable, low weight, high value products—are flown to European markets.

The rest is freighted by sea and can survive several weeks under carefully controlled conditions, said Symington.

The publishing industry has also taken a major hit. South Africa was the featured market-focus country at the three-day London Book Fair this week.

Forty-seven authors were scheduled to fly to the United Kingdom to promote their work, but only 12 had left South Africa before the flight ban.

Kevin Bloom, who could not attend the official UK launch of his book, Ways of Staying, said the book fair was “the greatest opportunity we had as a literary industry to showcase our work to the biggest market of world literature readers”.

British Council spokesperson Janine Raftopolous, who has been working with South African publishers on the market focus project for a year, said: “You can’t put a price on our disappointment.”

Lionel Faull

Lionel Faull

Lionel is a reporter at the Mail & Guardian Centre for Investigative Journalism, Amabhungane. Read more from Lionel Faull

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