Icelandic Ash Leaves Air Travel In Shutdown Mode

For the first time in living memory, there is no-zone flying area in Britain, following the massive eruption of a previously dormant volcano in Iceland, which spread massive amounts of ash into the skyline.  For the past 48 hours, airports across the UK and Northern Europe have been turned into parking lots, with up to half a million people affected by this air travel lockdown, which has nothing to do for once, with human elements.

Airports have closed in Sweden, Denmark, Belgium and France, leaving many passengers stranded, furious about the lack of communication and sleeping on benches, rather than comfortable hotel or holiday apartment beds.  The air chaos has also had effects on other forms of transport, with EuroStar almost completely booked up and a high demand on the ferries too, with the port of Dover struggling to cope with the increased amounts of consumer traffic.

This sky lockdown has been caused due to volcanic ash from the volcano eruption, which has been erupting for nearly a month now, but nothing quite like what we’ve seen in recent days.  Plus, there are no signs of this eruption ending anytime soon.  All airports in the UK have shut until at least 2am tomorrow morning, and British Airways has now cancelled all flights out of Heathrow tomorrow.   Only minimal services coming out of Glasgow and Irish airports, as the ash cloud descends across the UK.  There have already been reports of ash falling to the ground in Northern Scotland, though the health risk is thought to be minimal.  It shouldn’t cause serious harm, but health warnings are urging everyone to take precautions. 

Neither recent industrial action, nor terrorism threats could do what the volcano 900 miles away has done, grounded air travel to a comprehensive halt.  Safety is the paramount concern here and it is simply not safe for planes to fly through the ash smoke – otherwise their engines will either fail, stall or shutdown.  The possible results would be cataclysmic to even think about it.  This is the biggest shutdown since 9/11, with over 4,000 flights cancelled and more heading that route as the weekend goes on. 

Travel industries have urged customers not to panic and try to understand what is happening here.  Some are complaining of a lack of information, which is perfectly understandable and the disruption is likely to continue into next week as well.  With the snowstorms of the start in the year, plus the recent British Airways strikes and the threatened rail strikes, 2010 is turning into a miserable year for the travel industry.

Volvo Taken Over By The Chinese - Has China Got The Car Industry Back On Track?

   

Last weekend, manufacturer giant Ford took the decision to sell the Swedish carmaker, Volvo to the Chinese car manufacturer Zhejiang Geely Holding.  The deal, signed in Gothenburg, Sweden is worth an estimated £1.2billion making Zhejiang Geely Holding the largest private carmaker in China. 

It is the biggest signature of a Chinese company from a foreign carmaker and it only comes weeks after China overtook the USA as the top dog in the car market.  The deal was originally arranged in December, in light of the uncertainty over the growing recession and it should save 19,000 jobs worldwide at Volvo.  Largely, Volvo’s car sales have slumped massively, like many rivals since the credit crunch.  Fortunately, their situation isn’t as dire as that of Saab, which has needed rescuing to stay afloat and the well-documented problems with the Japanese figurehead, Toyota.

Ford paid £4.3billion for Volvo in 1999, and that figure shows how much the car industry has suffered in recent years, really feeling the bite of the economic issues in the world.  Zhejiang Geely Holding started looking into buying out Volvo over three years ago.  Last weekend, it was announced that Volvo would retain its Swedish backbone and it would still be run from its main headquarters base in Sweden.  Unlike Kraft’s broken promises when it bought out Cadbury’s in January, it will not move all production over to its main base in China.  The Volvo plant in Belgium will not be affected either, after fears had recently increased about job losses.  However, there are already plans for a new Volvo plant to be built in China, which will be capable of building 300,000 vehicles a year.  Geely are confident that Volvo could sell 200,000 extra cars a year in China, should they get the go-ahead to build the new plant.

Ford said it wanted to go through with the deal very quickly, so it could ‘sharpen the Ford brand across the world.’  Having disposed of the likes of Aston Martin and Jaguar since 2007, it might concern some though about Ford’s desperation to sell for a financial benefit.  During a traditional handover period, Ford will continue to supply Volvo with automotive parts and supplies.  Volvo sold 324,000 cars in 2009, which was 10% down on its 2008 figures.  However, Volvo sales have soared at the start of 2010, going up 40% in the USA in the first two months of this year.

The takeover is expected to be formerly completed in the summer.  The Chinese have recently agreed to take over parts of the failing Saab business and recently pulled out of a takeover deal of General Motors, following the failing to gain government approval in China.  This confirms the belief that China is now the country where the car-making machine is.  After months of trauma, the car industry is starting to recover, at least in some areas of Asia.  Can it recover soon enough elsewhere around the world….only time will tell.