WRAPUP 1-Volcanic ash may return to Europe, hit air traffic

* Eurocontrol warns that ash could move to Iberian peninsula

* Lufthansa, Air Berlin criticise how closures are handled

* Air France-KLM April passenger traffic drops in April

* Aer Lingus April passenger traffic down by a quarter

By Tim Hepher and Maria Sheahan

PARIS/FRANKFURT, May 10 (BestGrowthStock) – Travellers in Europe
face fresh air traffic disruptions as a volcanic ash cloud that
cost airlines millions of euros last month started drifting back
to the continent, according to authorties.

European air traffic agency Eurocontrol said on Monday areas
of higher ash concentration could move from over the Atlantic
Ocean back toward the Iberian peninsula, threatening fresh
airspace closures in Portugal and Spain.

Europe has been dogged for weeks by repeated shutdowns of
air traffic since an erupting volcano under the Eyjafjallajokull
glacier in Iceland started spewing ash in April.

Hundreds of flights were cancelled over the weekend after
the shifting cloud sparked fresh fears of engine-clogging ash.

Italy and Germany reopened their airspace on Sunday, but
restrictions were left in place in parts of Portugal, Spain,
Austria and the United Kingdom. [ID:nLDE64808J]

The biggest closure so far lasted for almost a week from
April 15, causing about 100,000 flight cancellations, stranding
millions of passengers and costing airlines more than $1.7
billion in lost revenue. [ID:nLDE63L16D]

Volcanic ash is abrasive and can strip off aerodynamic
surfaces and paralyse aircraft engines. It can also damage
aircraft electronics and windshields.

The most recent closures led to fresh criticism of how air
traffic authorities are handling the situation. Germany’s
Lufthansa (LHAG.DE: ) and Air Berlin (AB1.DE: ) called for
authorities to gather data on ash particles rather than just
relying on computer models. [ID:nLDE64918H]

Europe’s airlines are now starting to tally up the ash
cloud’s damage to their business in terms of passenger numbers.

Air France-KLM (AIRF.PA: ) said it lost nearly a quarter of
its European passenger traffic in April due to airspace closures
from the volcanic ash cloud, driving total traffic down 16
percent. [ID:nLDE6490EV]

Irish airline Aer Lingus (AERL.I: ) said it carried over a
quarter fewer passengers. UK airports handled 23 percent fewer
passengers in April, owners Ferrovial (FER1.MC: ) said.
[ID:nLDE6490DA] [ID:nWLA3449] [ID:nLDE6490DJ]

Fraport (FRAG.DE: ), operator of Frankfurt airport in Germany,
is due to publish its April traffic figures as well as
first-quarter results on Tuesday.

The hit to April passenger traffic comes just as airlines
around the world start to recover from a severe drop in traffic
that reached its severest point in March 2009.

According to industry body International Air Transport
Association, the world’s airlines lost about $9.4 billion last
year as customers curbed spending during the recession.

They stand to lose another $2.8 billion this year, excluding
any impact of the volcanic ash cloud. [ID:nLDE62A0OH]

Air France-KLM reiterated that every day on which it has to
completely suspend its flights lowers its net operating result
by 35 million euros.

Lufthansa, which is due to publish traffic figures on
Tuesday, has said it lost almost 200 million euros due to
volcanic ash in April.

“The snafu over the weekend will likely cost Lufthansa a few
more million euros and be visible when traffic figures for May
are released,” LBBW analyst Per-Ola Hellgren said.

Shares of Lufthansa were up 2.5 percent by 1318 GMT, Air
France was 5.8 percent higher and Aer Lingus had gained 3.8
percent as a rescue package to tackle the euro zone debt crisis
lifted markets across Europe.

Stock Market Basics

(Additional reporting by Padraic Halpin in Dublin and Rhys
Jones in London; Editing by David Cowell)

WRAPUP 1-Volcanic ash may return to Europe, hit air traffic