At the beginning of this year, few people - and certainly few businesses – would have imagined that we would now find ourselves in the midst of extreme travel disruption due to the eruption of a relatively unknown volcano in Iceland.
The Eyjafjallajökull volcano first began to erupt in March of this year but it was not until its second, more dramatic eruption in April that we saw the unprecedented move to shut large swathes of European airspace due to the dangerous volcanic ash that it was spewing high into the atmosphere.
Globalisation reliant on air travel
This loss of air travel has certainly highlighted how reliant we are on modern air transport and the degree to which it facilitates the level of globalisation we have come to expect. We have effectively been transported back in time to an age when flying was unknown and the main forms of transport were sea and road.
The halt of UK and European air travel has left thousands of people stuck in limbo, unable to come or go, stranded where the pause button deemed fit. Many businesses and business people have also been affected, unable to get back from holidays or business trips, struggling to import or export much needed goods, and unable to attend important meetings abroad.
Global implications
The extent of the disruption has not only been felt in the UK and Europe but also worldwide.
Yesterday, Nissan suspended production at two of its factories in Japan due to the fact that it could not get hold of crucial air pressure sensors.
Kenya’s economy faces devastating losses as it “haemorrhag[es] $1.3m a day in lost [flower] shipments to Europe” and “there is no diversionary market [as] flowers and courgettes are not something the average Kenyan buys.”
Fujitsu has temporarily suspended exports of notebook computers to Europe and has been unable to say how long its European stocks will last or how much it stands to lose if the disruption continues.
The UK premiere of Iron Man 2 has been moved to Los Angeles, and many sporting, music, movie and other entertainment events face schedule changes and disruption.
Not to mention of course, the financial impact upon European airlines and tour operaters, with the International Air Transport Association stating that losses in the European airline industry had reached £165m a day.
Business continuity
The complete lack of European flights has certainly reinforced the need for business continuity planning.
Stephen Cross, CEO of Aon Global Risk Consulting, observed that “as economies contract or competition increases, lean manufacturing becomes the name of the game… Such an approach might be highly efficient when things are running smoothly, but in the event of a major disruption event such as this, it can lead to significant delays in key materials and inputs being delivered, or in a worst case scenario to a systemic failure in your supply chain” (Continuity Central).
As the volcanic disruption has highlighted though, it is not only suppy chains and operations that can be affected. With many business owners, directors, managers and staff stranded, a business also needs to be able to continue in the absence of its people.
Not only that, but as the plight of the airlines emphasizes, a business also needs to have contingency plans in place for times when the very service it provides cannot be delivered. As Jan Husdal rightly pointed out, “a flight is not something you can produce and stock somewhere. It is produced and instantly consumed at the same time… Without passengers and without flights, no airline can survive.”
Yet, in A Decade of Living Dangerously – The Business Continuity Managment Report (produced only a year ago, in March 2009) The Chartered Management Institute reported that (of the businesses they surveyed and received responses from) only 52% had specific business continuity plans covering their operations and that generally managers within organisations remained complacent about continuity.
Obviously there are some eventualities that are almost impossible to predict and therefore to plan for – the black swans of this world – but that is not to say that we should not be building robustness into our businesses and systems now.
Have you been able to run your business without access to flights?
What would happen if other transport systems were unavailable to you? Does your business have alternative transport plans in place?
Were you or any of your staff stranded by the flight disruptions?
If you have not experienced any disruption, have you designed your business in such a way that it could continue in your absence, should you ever be stranded in the future?
Can you and your staff access emails, documents and telephone services remotely if you are unable to get to the office?
Although the impact of the volcanic ash disruptions is expected to be relatively low in Europe, (RBS has predicted an impact on GDP in Europe of 0.1%), history warns that we are not necessarily out of the woods yet. According to the Telegraph, the last time Eyjafjallajökull erupted (in the early 1820s) it blew intermittently for 14 months and on each occassion of its previous eruptions it has been followed within months or a year or so by a major eruption at Katla (a nearby volcano that is known to be more violent). Presently there are no ground rumblings at Katla and the conditions that have led to the unprecendented closures of air space are rare, but this event has very much highlighted the vital and urgent need for business continuity planning. Without it you risk the future well being of your business.
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