Korean Industries Reeling From Volcanic Ash Effects

Korean industries are suffering increasing damage from the volcanic ash from Eyjafjallajökull glaciers in Iceland.

Especially hard hit is the electronics industry, which exports products via cargo flights, as well as the aviation and tourism sectors. Most routes linking Korea to major European airports remained shut down for the fourth consecutive day after the volcano erupted Wednesday.

Fears are mounting that the suspension of flights will become prolonged because when the volcano will stop vomiting ash is unknown. Moreover, damage from ash continues to spread to southern and Eastern Europe.

The Korea Meteorological Administration forecast that the volcanic ash and clouds will start to affect Korean skies from as early as Tuesday or Wednesday.

○ State of emergency for aviation and tourism

Korean Air canceled seven passenger and five cargo flights bound for Europe from Incheon International Airport Sunday. Asiana Airlines also canceled all of its three flights bound for the continent the same day. Ninety flights of Korean and foreign air carriers linking Incheon and Europe -- 58 passenger and 32 cargo flights -- were canceled between Friday and Sunday due to the volcano’s eruption.

A German traveler slept for two nights on the floor at Incheon International Airport. “We’ve been stranded en route to Germany,” he said. “My wife, our son and I have been waiting for the resumption of flights indefinitely, eating hamburgers.”

All flights to central and northern Europe, including to Germany, the U.K., the Netherlands, Belgium, Sweden, Ireland and Finland, were halted as of yesterday afternoon. Flights to France, Italy, Poland and Norway are being partially operated.

A Korean Air source said, “Since damage from the volcanic ash is spreading to southern Europe and Russia, a growing number of airports are being shut down.”

The International Civil Aviation Organization said the aviation disturbance caused by the volcanic explosion is more serious than the situation following the Sept. 11 terror attacks on the U.S. in 2001. According to Euro Control, which oversees European aviation safety, 77 percent, or 17,000 of the 22,000 flights, scheduled within Europe were canceled as of Saturday. The International Air Transport Association estimated that the damage to the global aviation industry stemming from the volcano will exceed an average of 200 million U.S. dollars per day.

The tourism industry is also expected to suffer huge damage because of the halt of air traffic. A Hana Tour source in Seoul said, “Tourists have canceled reservations for tour packages to Europe for four consecutive days,” adding, “We are refunding or introducing alternative tours to an average of more than 200 customers per day.”

○ Damage to electronics and exports

Korea’s export industries are facing a disruption in transportation to Europe. Generally, mobile handsets and precision parts are exported via air rather than rail or sea.

An LG Electronics source said, “I heard from a logistics staff member that the situation in Europe is more serious than thought,” adding, “We will devise enterprise-wise countermeasures, including the formation of a task force to prepare ourselves for a prolonged situation.”

Shipments to Europe account for 20-30 percent of all mobile handset exports at Samsung Electronics and LG Electronics.

Participants at the Hannover Messe 2010, the world’s largest machinery industry expo to be hosted by Germany Tuesday to Friday, are also on high alert. Lee Su-yeong, a manager at the Korea Investment-Trade Promotion Agency’s Hamburg office, said, “Of the 37 companies set to participate in the Korean pavilion at the expo, only two have arrived,” adding, “We expect problems promoting Korean products.”

Certain industry insiders predict damage from the volcanic explosion will last for months in the worst-case scenario. Volcanic ash is also expected to affect skies over the Korean Peninsula from Tuesday because it is moving eastward fanned by jet stream.

Kim Seung-beom, an officer at the yellow dust monitoring division of the Korea Meteorological Administration, said there is no cause for alarm. “Most of the volcanic ash will subside while spreading, and Korea will face no major aviation disruption. The situation will be similar to a day when Korea embraces a light storm of yellow dust, but people still need to use caution since sulfur oxide in the ash could be harmful to the body,” he said.