Image: Stranded pasengers
Jacques Brinon  /  AP
People queue at the Eurostar train check in desk while an information board reads "All Eurostar trains fully booked Friday and Saturday" at the Gare du Nord train station in Paris, April 16.
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updated 4/16/2010 7:18:11 PM ET 2010-04-16T23:18:11

The eruption of a volcano in the tiny, isolated island nation of Iceland is threatening to turn into a major headache for businesses across Europe and around the world as a spreading ash cloud closes more European airports.

Airlines are already counting the cost of grounded planes, and there are growing fears about the transportation of food supplies and other essential goods should the flight disruptions persist for several days — or longer.

But there were also some early winners from the unprecedented situation, with rail, bus and ferry tour operators all quick to lay on extra services for stranded business and leisure travelers as hotel rooms filled up.

Airline shares took a hit as the Geneva-based International Air Transport Association estimated that the disruption is costing the industry some $200 million a day in revenues. IATA added its forecast was "conservative" and costs will mount further as carriers reroute aircraft and care for stranded passengers.

Eurocontrol, the European air traffic agency, said some 16,000 flights were canceled on Friday, more than half the 28,000 that usually operate. Delays and cancelations will continue on Saturday as the ash cloud from the eruption of the volcano beneath Iceland's Eyjafjallajokull (ay-yah-FYAH'-plah-yer-kuh-duhl) glacier moves south and east. The flight ban was imposed because of concerns about pilot visibility and jet engine failure from the ash.

Ryanair Holdings PLC, the leading low-cost airline in Europe, said it was extending the cancelations across most of its network through to at least lunchtime on Monday to give passengers clarity about the situation and a chance to rebook flights.

"This spreading cloud of volcanic ash is an unprecedented event in Ryanair's 26 year history, and we are continuing to work around the clock to minimise its effects on our schedules," said Ryanair Chief Executive Michael O'Leary.

Ashley Steel, global chairman for transport and infrastructure at professional services company KPMG, said that the biggest losses would come from trans-Atlantic business traffic, with the impact on economy class revenues muted by the fact that people would likely change their bookings to a later date.

"This is yet another dramatic and costly event for the global aviation industry which will have a significant impact on annual revenues," Steel said, adding that the development reinforced the case for consolidation of the international airline sector.

"Truly global airlines will be much better placed to deal with the financial fallout from these types of events," he said.

Video: Airlines wary of volcanic ash threat British Airways shares dropped 1.1 percent, German flag carrier Lufthansa lost 2.1 percent and Air France-KLM slipped 1.7 percent.

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There were few early reports of major impacts on exports and imports, but analysts stressed that the stakes would rise each day of the flight ban.

"Some businesses will be affected by the inability for freight to get in and out of the country," said Howard Archer, chief economist at IHS Global Insight in London. "As long as the disruption is not too long, this should not be a major problem. The main problem will be for goods that are perishable."

The pharmaceutical industry is particularly reliant on air freight because of the high value and low weight of their products.

The Italian farmer's association said that it may become an issue to import out of season goods from other areas, even though Italian airports are still open as shipments often come via other major European cities.

Chiara Coffele, export manager of the family Coffele winery in Soave, Italy, was unsure whether she would make a wine festival and other business appointments in Norway in the coming days after her flight from Milan was canceled on Thursday.

Coffele travels two or three times a year to Norway, where the family sells 15 percent of the 510,000 bottles of wine it produces annually. The three-day Stavanger wine festival is usually a key network event.

While others are missing some holiday time because of the flight cancelations, "I get a little less work," Coffele said.

A spokesman for the flower market in Berlin, which sells flowers that have been imported from all over the world, said there had not been any problems with the delivery on Friday morning and he was not aware of logistical problems for Saturday's flower trade. Several sushi restaurants said they get fresh fish on Thursday and had no deliveries until Monday.

As Europe's airports emptied, travelers instead crowded train stations, bus depots and rental car offices.

The high-speed Eurostar rail service linking Britain and continental Europe reported thousands of new bookings for the next few days.

Video: European air travel delays to linger? National railway operator Deutsche Bahn said it deployed all available trains and asked personnel to work extra shifts on the weekend. Nonetheless, it warned of overcrowded trains and long lines at booking counters. Norway's NSB railway company put extra trains on routes from Oslo to major Norwegian cities and the Swedish capital, Stockholm.

Germany's Sixt car rental reported long lines at German branches.

"There's a rush on our rental offices," said spokesman Frank Elsner. "We're trying to mobilize everything we can and try to offer an additional 2,000 cars across Europe in cooperation with our partners to make sure travelers can get back home on the weekend."

In Britain, Network Rail canceled the bulk of engineering work that was planned for the next few days and also added extra services.

At the Jumbo Hostel — a Boeing 747 remodeled into a 27-room hotel just outside the Arlanda airport in Stockholm — rooms were filling up fast.

"I think we'll be full tonight," said manager Oscar Dios. "It's this sort of thing that we're here for. There is no place to go at the airport."

AP reporters Robert Barr in London, Kirsten Grieshaber and Geir Moulson in Berlin, Ian MacDougall in Oslo, Colleen Barry in Milan and Frank Jordans in Geneva contributed to this report.

Copyright 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Photos: Volcanic eruption in Iceland

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  1. Stranded British citizens wait beside the Pride of Bilbao Ferry, at Santurtzi, northern Spain, before the trip back to Britain Wednesday, April 21. (Alvaro Barrientos / AP) Back to slideshow navigation
  2. A passenger jet flies over houses as it prepares to land at Heathrow Airport, London, U.K. Flights returned to Europe's skies in greater numbers Wednesday after the chaos caused by ash blown from an erupting Icelandic volcano. (Ben Stansall / AFP - Getty Images) Back to slideshow navigation
  3. Tourists who were evacuated by the Belgian Army hug relatives as they arrive in Zaventem airport, Belgium. (Dirk Waem / AFP - Getty Images) Back to slideshow navigation
  4. Passengers rest as they wait for their delayed flights at the Indira Gandhi International Airport in New Delhi, India. The International Air Transport Association says disruptions to European air travel caused by the volcanic ash cloud have cost the industry at least $1.7 billion. (Gurinder Osan / AP) Back to slideshow navigation
  5. A wounded soldier is carried from a C-17 transport plane to an ambulance after it arrived at Andrews Air Force Base, Md., carrying 20 wounded soldiers from Iraq and Afghanistan, on Tuesday, April 20. Volcanic ash in the airspace over Europe prevented the U.S. military from flying battlefield wounded to an Air Force hospital in Germany. (Cliff Owen / AP) Back to slideshow navigation
  6. French citizens Mercedes and Jimmy Elahcene sit together in John F. Kennedy International Airport, Tuesday, in New York City. Stranded since Saturday, they said they do not have enough money for a hotel. (Mario Tama / Getty Images) Back to slideshow navigation
  7. Jon Oscar Bjorgvinnossen drags a stressed and stubborn sheep across ash covered ground to a barn on the Berjanes farm near the town of Hvolsvollur, Iceland on Tuesday. The ash has contaminated the farm's grazing land making it necessary to evacuate all animals. (Carolyn Kaster / AP) Back to slideshow navigation
  8. Relatives of passengers wave to a Lufthansa airplane as it takes off from the airport in Duesseldorf, Germany, on Tuesday, headed for Chicago. Travel chaos in Europe began to ease as some countries resumed flights after days of closures due to volcanic ash clouds from Iceland. (Volker Hartmann / AFP - Getty Images) Back to slideshow navigation
  9. People greet family members at Tegel airport in Berlin after they returned from Palma de Mallorca on one of the first flights bringing passengers back to Germany on April 20. (Thomas Peter / Reuters) Back to slideshow navigation
  10. A member of the German Air Traffic Control center crisis management group points at a map showing the current air traffic in the sky over Germany near Frankfurt on Tuesday, April 20. The Eurocontrol air traffic agency in Brussels said it expects 55 to 60 percent of flights over Europe to go ahead Tuesday, a marked improvement over the last few days. By midmorning, 10,000 of Europe's 27,500 daily flights were scheduled to go. (Marius Becker / AP) Back to slideshow navigation
  11. An aircraft of Air Berlin approaches Tegel airport in Berlin on April 20. Frustrated by the days-long grounding, both Lufthansa and Air Berlin began flying without full air-traffic control. (Gero Breloer / AP) Back to slideshow navigation
  12. Passengers sleep at the T4 Barajas airport, in Madrid, Spain, on April 20. Spain offered to let Britain and other European countries use its airports as stopovers to get passengers stranded by the volcanic ash cloud traveling again by train, bus and ferry. (Daniel Ochoa de Olza / AP) Back to slideshow navigation
  13. Kaylian Vanhadenhoven, 13, of Belgium, offers bread and jam to other stranded passengers at John F. Kennedy International Airport in New York on April 20, as many passengers traveling to and from Europe were still stuck due to canceled flights. (Seth Wenig / AP) Back to slideshow navigation
  14. Ash and smoke bellow from the Eyjafjallajökull volcano near Hella, Iceland, on Tuesday, April 20. (Emmanuel Dunand / AFP - Getty Images) Back to slideshow navigation
  15. A technician takes a photograph of an engine on a Lufthansa aircraft at Tegel airport in Berlin, on April 20. (Gero Breloer / AP) Back to slideshow navigation
  16. An Icelandic farmer clears ash from a goat house after heavy ash billowing from the Eyjafjallajokull volcano covered this farm in Steinar, Iceland, on April 20. (Emmanuel Dunand / AFP - Getty Images) Back to slideshow navigation
  17. A British family prepares to board the Royal Navy warship HMS Albion at Santander's port, northern Spain, on April 20. (Alvaro Barrientos / AP) Back to slideshow navigation
  18. A woman hugs her boyfriend as he arrives at Schiphol Airport in Amsterdam on April 20. (Toussaint Kluiters / Reuters) Back to slideshow navigation
  19. When the Eyjafjallajökull Volcano began erupting on March 20, the first lava to erupt came from vents on the lower slopes of the volcano, which were snow-covered, but not under the mountain’s year-round ice cap. Lava flows filled gullies and built mounds of frothy rock, and they melted and vaporized the winter snow, creating relatively small steam plumes. In mid-April, however, the character of the eruption changed dramatically, and this natural-color satellite image from April 17 provides a look at the new eruptive phase. A cloud of charcoal-brown ash covers half the image. A fresh plume of ash rises over the summit, its southern face illuminated by sunlight and its northern face deeply shadowed. The ash column casts a tall shadow onto the snow-covered ground to the north. (AFP - Getty Images) Back to slideshow navigation
  20. Huw Thomas, of England, eats his breakfast in his cot at John F. Kennedy International Airport in New York, Monday, April 19. Thomas and his family were originally supposed to fly back to England from a vacation in New York on Friday, April 16, but now they are unsure of when they'll be able to return home. (Seth Wenig / AP) Back to slideshow navigation
  21. Molten lava shoots out of an erupting volcano near Eyjafjallajokull, on April 19. An Icelandic volcano that has grounded planes across Europe is spitting lava but less ash, officials said on Monday, offering travellers hope that skies might clear at a faster rate. (Reuters) Back to slideshow navigation
  22. A passenger rests on her belongings in the departures area at Madrid's Barajas airport on April 19. (Sergio Perez / Reuters) Back to slideshow navigation
  23. Passengers wait for a train to depart to Rome at Milano Centrale train station on April 19 in Milan, Italy. Passengers are looking for alternative routes to return home after days of disruption in air travel as volcanic ash continues to fill the atmosphere over Europe. (Vittorio Zunino Celotto / Getty Images) Back to slideshow navigation
  24. Ash covers an evacuated farm as smoke and ash from the Eyjafjallajökull volcano block daylight on April 19, near Porvaldseyri. (Emmanuel Dunand / AFP - Getty Images) Back to slideshow navigation
  25. A couple sleeps at Gatwick airport in southern England on April 19. (Carl Court / AFP - Getty Images) Back to slideshow navigation
  26. A stranded passenger waits with her luggage at Termini train station in Rome on April 19. (Pier Paolo Cito / AP) Back to slideshow navigation
  27. A man crosses an empty departures hall at Gatwick airport in southern England on April 19. (Carl Court / AFP - Getty Images) Back to slideshow navigation
  28. Iceland's Eyjafjallajoekull volcano continues to erupt in this image released on Sunday, April 18. The eruption has caused havoc with air travel across Europe and forced hundreds of locals to evacuate their homes. (Ragnar Th Sigurdsson / www.arctic-images.com) Back to slideshow navigation
  29. A National Geographic film crew sets up on southern Iceland's Eyjafjallajokull glacier after landing close to the volcano on April 18. Scientists say that because the volcano is situated below the glacial ice cap, magma is being cooled quickly, causing explosions and plumes of grit. (Reynir Petursson / Helicopter.is / AP) Back to slideshow navigation
  30. Farmer Bjarni Thorvaldsson pulls volcanic ash off a barn roof on April 18. (Lucas Jackson / Reuters) Back to slideshow navigation
  31. Volcanic ash mixes with water, sliding down a barn roof near Eyjafjallajokull on April 18. (Lucas Jackson / Reuters) Back to slideshow navigation
  32. A passenger waits at Bilbao airport in northern Spain on April 18, after all flights were canceled due to the ash. (Alvaro Barrientos / AP) Back to slideshow navigation
  33. Synchronized ice skating coaches Danka Durasevic, right, and sisters Sara and Sandra Perl, all from Croatia, look for a cab that will fit all their luggage in New York on April 18. They were among the thousands of visitors stranded in the U.S. due to the ash. (Seth Wenig / AP) Back to slideshow navigation
  34. A cloud of ash looms over a farm on April 17. (Ingolfur Juliusson / Reuters) Back to slideshow navigation
  35. Dairy farmer Berglind Hilmarsdottir of Nupur, Iceland, looks for cattle lost in ash clouds on April 17. (Brynjar Gauti / AP) Back to slideshow navigation
  36. Ranchers corral cattle in Nupur as volcanic ash swirls around them on April 17. (Brynjar Gauti / AP) Back to slideshow navigation
  37. Volcanic ash is seen over Iceland´s main ring road near Skogar, east of the eruption on April 17. (Brynjar Gauti / AP) Back to slideshow navigation
  38. A plane flies past smoke from the volcano on April 17. (Lucas Jackson / Reuters) Back to slideshow navigation
  39. A traveler watches a giant board announcing canceled flights at the Charles de Gaulle airport near Paris on April 17. Three airports in Paris and 23 others across the country were closed because of the cloud of ash. (Thomas Coex / AFP - Getty Images) Back to slideshow navigation
  40. Two flight controllers in Belgrade, Serbia, chat after the closing of airspace over Serbia April 17. (Alexa Stankovic / AFP - Getty Images) Back to slideshow navigation
  41. Travelers rest at the deserted Austrian Airlines terminal at the Vienna airport after all flights were grounded on April 17. (Leonhard Foeger / Reuters) Back to slideshow navigation
  42. Train passengers crowd the Milan railway station in Italy on April 17. Europeans are turning to different modes of transportation with so many flights grounded. (Luca Bruno / AP) Back to slideshow navigation
  43. Cars line up at a departure point at the car ferry terminal in Calais, France, on April 17. Ferry operators in Britain received a flurry of bookings from people desperate to cross the English Channel to France, while London taxi company Addison Lee said it had received requests for journeys to cities as far away as Paris, Milan, Amsterdam and Zurich. (Michel Spingler / AP) Back to slideshow navigation
  44. A reddish sky at sunrise hangs over Budapest, Hungary, on April 17 as ash spewed by Iceland's Eyjafjallajoekull volcano reaches across Europe. (Gyula Czimbal / EPA) Back to slideshow navigation
  45. Horses graze as a cloud of volcanic matter rises from the erupting Eyjafjallajokull volcano, on Friday, April 16, in Fimmvorduhals, Iceland. (Nordicphotos / Getty Images Contributor) Back to slideshow navigation
  46. Passengers rest on cots as they wait for the resumption of air travel on April 16 at the airport in Frankfurt, Germany. (Torsten Silz / AFP - Getty Images) Back to slideshow navigation
  47. Passengers wait in a terminal in Frankfurt on April 16. (Michael Probst / AP) Back to slideshow navigation
  48. Passengers wait for transportation to Gatwick Airport after arriving in Glasgow, Scotland on April 16. (Jeff J. Mitchell / Getty Images) Back to slideshow navigation
  49. Ground staff place a protective cover on the engines of an aircraft at Belfast City Airport in Northern Ireland on April 16. (Peter Muhly / AFP - Getty Images) Back to slideshow navigation
  50. A ground stewardess of Air France/KLM distributes croissants to would-be travellers at Vienna's Schwechat airport on April 16. (Hans Klaus Techt / EPA) Back to slideshow navigation
  51. Check-in counters are closed at the airport in Duesseldorf, Germany, on April 16. (Oliver Berg / EPA) Back to slideshow navigation
  52. A plume of volcanic ash from Iceland, top left, streams eastward on April 15. (NEODAAS, University of Dundee via AP) Back to slideshow navigation
  53. Volcanic scientists leave the area after collecting samples of ash in eastern Iceland on April 15. (Omar Oskarsson / AFP - Getty Images) Back to slideshow navigation
  54. Passengers wait at the departures area at Madrid Airport in Spain on April 15. (Andrea Comas / Reuters) Back to slideshow navigation
  55. Smoke and steam hang over the volcano in Iceland early April 15. Ash from the eruption is drifting into other countries in northern Europe and forcing the cancellation of hundreds of flights. (Brynjar Gauti / AP) Back to slideshow navigation
  56. A sign at England's Luton Airport warns passengers of flight delays and cancellations on April 15, after Britain's Civil Aviation Authority grounded all non-emergency flights. (Matt Dunham / AP) Back to slideshow navigation
  57. A farmer took this picture of the Eyjafjöll volcano shortly after its most recent eruption on April 14.
    View two versions of this image in PhotoBlog and discuss which you prefer. (Olafur Eggertsson / Reuters) Back to slideshow navigation
  58. Glacier melt from the erupton flooded areas along this river on April 14. (Icelandic Coast Guard via Reuters) Back to slideshow navigation
  59. A plume of ash and steam rises in Iceland on April 14. (AP) Back to slideshow navigation
  60. Rescue teams evacuate residents from rapidly rising waters near the volcano on April 14. (Halldor Kolbeins / AFP - Getty Images) Back to slideshow navigation
  61. A plume of steam from the volcano rises 22,000 feet on April 14. (Icelandic Coast Guard via Reuters) Back to slideshow navigation
  62. The eruption melted ice on the glacier around the volcano, flooding local areas on April 14. Hundreds of residents were evacuated. (Icelandic Coastguard via AP) Back to slideshow navigation
  63. Rivers of lava flow from a volcanic eruption between the Myrdalsjokull and Eyjafjallajokull glaciers on March 24. (Helen Maria Bjornsd / Getty Images) Back to slideshow navigation
  64. A helicopter flies in front of lava shooting from a volcanic eruption between the Myrdalsjokull and Eyjafjallajokull glaciers on March 24. (Helen Maria Bjornsd / Getty Images) Back to slideshow navigation
  65. Tourists gather to watch lava spurting from the site of a volcanic eruption at the Fimmvorduhals volcano near the Eyjafjallajokull glacier on March 27. (Halldor Kolbeins / AFP - Getty Images) Back to slideshow navigation
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