(Article on the airlines and the Iceland volcano updated with latest news on ash cloud disruptions)

NEW YORK (TheStreet) -- Three major European airports have resumed services on Monday, May 17, after a thick cloud of volcanic ash from Iceland cleared up and a no-fly zone was lifted, the Associated Press reported.

As many as 1,000 flights in Europe were disrupted, mainly by closures at London's Heathrow and Gatwick airports and Amsterdam's Schiphol Airport. Though flights have resumed at these hubs, authorities are urging travelers to contact their airlines before heading to the airport, warning that it would take time for the airlines to clear the backlog of delayed flights.

MAY 17: Travelers check the departure information board outside Terminal 3 of Heathrow Airport on May 17, 2010 in London, England. A cloud of volcanic ash from Iceland has again caused disruption to UK flights.


reported that

British Airways

had experienced significant disruptions to it services, while major Europe discount carrier


had to cancel over 200 flights.

Air France-KLM

had to redirect flights bound for various cities in Europe.

Cathay Pacific Airways


redirected two flights headed for London and one bound for Amsterdam from Hong Kong, and

Singapore Airlines

diverted two European-bound flights as well, according to



Air traffic control agency Eurocontrol said 28,000 flights were expected in Europe on Monday, roughly 1,000 less than usual.

On Friday, May 14,


reported that ash from the Eyjafjallajokul volcano had led to the closure of Iceland's main airport, Keflavik International Airport, in Reykjavík.

As demonstrated by the ash clouds' return this month after a period of silence following its April outburst, they could be gone one moment and back again another, unannounced. It appears, then, that airlines and travelers will have to deal with the Iceland Eyjafjallajokul volcanic ash cloud nuisance for an indefinite amount of time, given the challenges of predicting where the wind will carry the debris next.

Iceland meteorologists told the

Associated Press

that despite their best efforts to predict these things, they "do not pretend to be psychics." Now, the


says, travelers in Europe, are reconsidering their summer travel plans.

Airlines in the meantime have been hit with the challenge of managing the uncertainty. Detours of just a few hours can, for example, rack up huge fuel bills of thousands of dollars.

Following the eruption of more Icelandic volcanic ash over the first weekend in May, the European air safety agency said it's considering adopting a new set of procedures for dealing with volcanic ash, which would greatly reduce airspace closures, according to a spokesman cited by the

Associated Press


These yet-to-be-approved procedures would follow the U.S. practice of imposing a 120-mile no-fly buffer zone for all planes in the vicinity of any visible ash plume,


reported, and would constitute a major shift from how European air transport authorities previously dealt with such issues.

European officials, of course, have come under immense criticism for closing off large areas of airspace when the Icelandic ash plumes first drifted towards the northern and western areas of Europe last month; grounding 100,000 flights and disrupting the travel plans of hundreds of thousands of passengers. Many wondered whether the European air transport authorities had overreacted with their measures.

Airlines have bled more than $1.3 billion as a result of the disruption.

Experts say that the volcano could continue releasing ash throughout the summer, but probably with diminshing intensity. Read on for


's pictures and story of the Iceland volcano ash clouds that have wreaked havoc on the airline industry ...

The volcanic eruption in Iceland that sent ash clouds soaring -- blanketing crucial airline air space around Europe and hindering flying visibility -- has bedeviled the airline industry since Monday, April 19, despite showing signs of mercy at times.

The impact on the bottom line of major airlines has been uncertain, as planes were grounded for days-long stretches. Airline executives and Wall Street analysts grew more concerned after ending the first week of the eruption with the belief that airlines would soon be back to normal.

But as the days progressed, flight restrictions around northern and central Europe did begin to ease. Air hubs in Germany, the Netherlands, Belgium, France, Northern Ireland, Scotland and England allowed some planes to fly, including some long-distance flights.

British Airways said on April 19 that it was losing £15 million to £20 million a day because of the disruptions caused by the volcano. The company's CEO said the air carrier has plenty of cash on hand to ride out considerably more cancellations. However, the CEO also said European airlines will be seeking compensation from their governments and the European Union related to the closure of Europe's air space -- a request that has a precedent from 9/11 air-space closures.

"By far the most exposed player is British Airways," FBE Aerospace analyst Saj Ahmad wrote of the various European airlines exposed to the natural disaster. "The airline was already reeling from a seven-day cabin crew strike that cost it £50m in total and now has displaced staff, crew, passengers and airplanes across the globe that it has to pay out for -- all at a time when it cannot fly or generate revenue to offset losses."

Above: Photo of a computer display at the European air navigation agency Eurocontrol, colored dots representing aircraft in flight in European airspace.

Austria reopened its airports on April 19, but many other airports across Northern Europe remained closed.

British Airways, Air France-KLM and


all ran test flights, and the airlines said the results indicated that air space should be reopened, but European governments were reluctant to change their stance. Jesup & Lamont's Becker was quoted on Monday morning saying that an airline could go bankrupt as a result of the prolonged closures. More than 63,000 flights in Europe had been canceled by April 19.

The British Airways CEO, along with other chief executives of European airlines, lashed out at European flight regulators, saying there was no reason for a blanket closure of air space any longer. An emergency meeting of European ministers was held in Madrid.


Helane Becker, a transportation analyst at the investment bank Jesup & Lamont, said the volcanic ash clouds were being treated as a weather-related event. That meant that airlines might not be as concerned about extra expenses such hotel charges and meal charges from their passengers because weather-related events are not the airlines' fault, she said.

Early during the eruption, Becker's opinion was that the financial impact of the ash cloud disruptions on major airlines could be "no worse than a penny or two per share."

Above: Air France planes are seen on the tarmac of the Charles-de-Gaulle airport in Roissy on April 16, in Paris. The airport was closed due to the ash clouds.


By that Monday, French, German and Dutch air space were still closed, while airports in Athens, Rome and Madrid were operating.

The ash cloud caused travel disruptions not seen since the Sept. 11 attacks on the U.S.

According to


, trade sources say that U.S. jet fuel prices were affected by the Iceland volcano and the massive travel disruptions. "With 17,000 flights canceled so far, and the possibility that it could go for awhile, there will be an effect on jet prices here," one U.S. trader told




Above: A river of ash and water produced by the volcano erupting under a glacier destroys roads and bridges in the Eyjafjallajokull region of Iceland


Wall Street viewed the volcano's financial impact on major airlines as moderate, according to Stifel Nicolaus analyst Hunter Keay.

Keay explained that every airline has some sort of budget for weather-related issues. Granted, flights were being interrupted and "probably quickly eating through some of these expenses now," Keay said. But, as long as they can re-accommodate their passengers, he argued that the financial impact should be minimal.

Still, Keay hedged his bets. "It's too soon to tell" what the exact financial impact would be, he said.

The frustration of airline executives at the deliberate response of the European air traffic system seemed to indicate growing concern about the impact on earnings. There were mounting calls for permanent changes to the system.


The ash cloud ballooned up to 36,000 feet at one point

see above


While health officials noted that it's unlikely the ash could directly harm human health, airline officials said it could cause catastrophic damage if it entered an airplane engine or obscured pilots' visibility.

Accumulated debris in plane engines can result in engine shut downs. In December 1989, for example, a KLM Royal Dutch Airlines 747 passed through an ash cloud as it approached Anchorage, Alaska. All four engines subsequently shut down, but the crew was able to restart two of them and land the plane safely.


To be on the safe side, airline authorities chose to ground planes across Europe.

Above: a list of canceled flights

Passengers numbering in the thousands couldn't travel into or out of North Europe as the dark clouds migrated south.


Flights to the U.S., Geneva, Paris and Brussels, among others, were either suspended or canceled.

Above: planes stand in their positions at Frankfurt International Airport on April 15

It's possible that many will not be able to get in or out of the UK until the skies are relatively clear again.

The same applies to passengers at airports in Norway and Sweden, among others.


London's Heathrow Airport is a crucial air transport hub, overseeing more than 1,000 flights each day

Above: stranded passengers at Heathrow Airport


As major airport hubs throughout Europe stayed closed Monday,

UAL Corp's

( UAUA) United Air Lines,

British Airways

( BAIRY), and

Virgin Atlantic

called off flights from the U.K.

U.S. carriers that operate trans-Atlantic flight say it is too soon to estimate the financial impact. However, the International Air Transport Association (IATA) announced on Friday that the financial impact on airlines in the wake of the Icelandic volcanic ash clouds will be more than

$200 million a day

in lost revenues.


(DAL) - Get Report

, which operates 104 trans-Atlantic flights each day, said it canceled 65 of those on Thursday, 60 on Friday, and another 49 flights on Monday.



, the principal U.S. carrier at London Heathrow, said on Friday it would operate to just two European countries, Italy and Spain.

On April 18, American and


cancelled 60 flights and 56 flights, respectively.

"US-based carriers too will be hurting, given that the North Atlantic market is their most profitable and lucrative. However,

the fact that that they are still able to deploy their jets and staff to other non-EU destinations means that they'll have some semblance of normality with fewer aggrieved passengers to contend with," Ahmad of FBE Aerospace said.

Still, Ahmad expects that United and American Airlines will suffer profound revenue shortfall. "Both are the biggest U.S. carriers to the U.K. and will lose millions every day this airspace closure continues," he said.

Together, Delta, United Airlines, American Airlines,

Continental Airlines

(CAL) - Get Report


US Airways


are losing $21.9 million a day, according to AirlineFinancials.com analyst Robert Herbst,



Earlier, budget airline Ryanair had called off its flights in and out of the U.K., Ireland, Norway, Sweden and Denmark.


When the plume of ash burst from the Eyjafjallajokull volcano in Iceland on Wednesday, it was actually the second time the volcano acted out this month. The volcano is still spitting debris into the air.

Above: the crater of the volcano under the Eyjafjallajokull glacier

According to the U.K. civil aviation authority web site, passengers experiencing airline delays of more than five hours or overnight were eligible for various forms of assistance, including meals and refreshments, free telephone calls, emails, telexes or faxes, ticket reimbursement and hotel accommodation.

Start Over>

-- Reported by Andrea Tse in New York; Ted Reed contributed to this article.


>>Volcano Impact on Airlines: $200M a Day

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