WRAPUP 3-Europe’s airlines, travellers suffer in snow, ice

* Flights grounded across northern Europe

* Delays weigh on airline shares in key Christmas period

* Heathrow seen operating at reduced capacity for days

* Cargo hit in France, German carriers hit

* BA shares down 1.5 pct, Lufthansa down 0.8 pct

(Adds analyst, BAA, Eurocontrol comment, details, shares)

By Rhys Jones

LONDON, Dec 20 (BestGrowthStock) – Snow and freezing temperatures
grounded flights across northern Europe on Monday, with
travellers trying to get away for Christmas set to be frustrated
further with more severe weather on the horizon.

British Airways (BAY.L: ), which is losing up to 10 million
pounds ($15.5 million) a day according to analysts, said arctic
conditions would continue to cause major disruption to its
operations and that more travel chaos was possible.

“We have BA down to deliver revenues of around 27 million
pounds a day in this quarter so assuming some 70 percent of that
is fixed cost it is probably losing about 8 million pounds a day
of profit,” said Davy Stockbrokers analyst Stephen Furlong, who
added that the vast majority of BA’s profit comes from its
operations out of London’s Heathrow airport.

BA said Heathrow airport would only be using one of its two
runways on Tuesday — as on Monday — meaning the airport would
be operating at a significantly reduced capacity.

It cancelled all short-haul flights after midday on Monday
and some long-haul services.

“It depends on the percentage of long-haul flights BA have
operated but I think they are probably losing around 10 million
pounds a day,” said Oddo Securities analyst Yan Derocles.

Other carriers at Heathrow such as Virgin Atlantic [VA.UL],
Cathay Pacific (0293.HK: ) and Qantas Airways (QAN.AX: ) have also
been forced to cancel flights in recent days.

EUROPE-WIDE CHAOS

Over 1,000 flights at Germany’s main airports were cancelled
and many more delayed after up to 40 cm of fresh snow blanketed
the country on Monday, though Lufthansa (LHAG.DE: ) said it was
confident it would operate a full service by Wednesday.

Air France (AIRF.PA: ) said there were serious delays to
passenger flights and cargo operations at the two main Paris
airports, Charles de Gaulle and Orly, following a snowstorm
earlier on Monday.

Brussels airport said on its twitter feed that it could not
guarantee de-icing of planes after 1400 GMT on Monday due to a
shortage of de-icer caused by transport problems in France.

Shares in BA and Lufthansa were 1.5 percent and 0.8 percent
down by 1545 GMT as the weather hampered operations in one of
the busiest weeks of the year for air travel.

London’s mayor Boris Johnson called for a “Herculean effort”
by Heathrow operator BAA and its contractors to get planes back
in the air.

Britain’s Met Office said it expected “freezing temperatures
and light to heavy snow” around Heathrow on Monday afternoon,
with further snow expected on Tuesday morning.

BAA, owned by Spain’s Ferrovial (FER.MC: ), expects more
flights to leave Heathrow on Monday than on Sunday, despite
forecasts for more severe weather, but urged customers not to
travel to the airport unless they have a confirmed booking on
one of the flights that is operating.

BAA Chief Executive Colin Matthews told Sky News that “more
flights would have to be cancelled” and that the airport would
not run at full capacity for “some days to come”.

Eurocontrol, the umbrella group for air-traffic control
across 38 countries, estimates more 22,500 flights across Europe
flights will be cancelled on Monday.

“We have today seen reductions up to 65 percent for major
airports like Paris Charles de Gaulle, Frankfurt, London and
Berlin Tegel,” said Ken Thomas, operations manager at
Eurocontrol. “Many of the delays we are seeing now in Europe is
because of the de-icing situation.”

ECONOMIC IMPACT

The severe winter weather could hit Britain’s economy and
plunge retailers into the red over their peak Christmas trading
period, according to Howard Archer, the chief European economist
at IHS Global Insight.

“The longer the severe weather persists, the greater the
impact will be, even allowing for the fact that much of any lost
production and construction activity can be made up,” he said.

“However, while in normal times most of any retail sales
lost to bad weather is also normally made up, this may be less
the case than normal due to the proximity of Christmas.”

Britain’s biggest department store chain John Lewis [JLP.UL]
said sales fell over 10 percent on Saturday, while France’s
Auchan told Reuters last week its business was being affected.
[ID:nLDE6BE0GS] [ID:nLDE6BI082] [ID:nLDE6BG1GR]

GATWICK

BA said it was aiming to run as many flights as it could
from Gatwick, south of London, and the smaller London City
airport in the east of the city.

A BA spokeswoman said it was too early to give any estimates
on the likely cost of the disruption. The airline said it lost
around 15 to 20 million pounds a day in passenger and freight
revenue during the Icelandic ash closure.

BA has had a tough year, with a series of strikes by cabin
crew costing in 150 million pounds and the dispute unresolved.

(Additonal reporting by Sarah Young, Mark Potter, Keith
Weir, Mohammed Abbas, Julie Crust and Lorraine Turner in London,
Angelika Gruber in Munich, and Maria Sheahan in Frankfurt, Ben
Deighton in Brussels; Editing by David Cowell)

WRAPUP 3-Europe’s airlines, travellers suffer in snow, ice