Volcanic activity: Businesses winning the Iceland 'boom'

iceland_volcano.gi.top.jpg By Dody Tsiantar, contributor


(Fortune) -- There's a silver lining to every cloud, even the one made up of volcanic ash. While air carriers are licking their wounds from losing an estimated $200 million a day due to the eruption of the Eyjafjallajokull volcano in Iceland, many other firms are smacking their chops at the opportunity to attract new customers. So who got rolling as the planes stayed on the ground?

Planes trains and automobiles...and ferries.

Stranded passengers have been booking just about any mode in Europe-rental cars, cabs, buses, trains and ferries-to get their travel plans back on track. Vendors are running full sprint to keep up with demand: Tour operators and corporations are chartering buses to get customers and executives from one end of Europe to the other. About half of Barcelona-based coach company Julia Tours' 100-bus fleet, as a result, is not in Spain but all over Continental Europe.

Rail and ferry service in Europe have been running at full throttle since the volcano's ash spread all over European airspace last Thursday. Even the luxury cruise ship Queen Mary 2 sold out of berths for its next two transatlantic crossings, departing from Southampton, England.

Though airports have finally opened, hundreds of planes and crews aren't where they're supposed to be, creating a logistical mess that will take the carriers days to untangle. "We've had surges like this before, with air strikes or bad weather, but nothing like this," says Eurostar official Richard Holligan. "This is quite sustained."

Eurostar, the high speed rail service that connects the United Kingdom and the continent via the Chunnel, added 41 trains through the weekend. From the eruption to April 20, it has transported 210,000 passengers, 60,000 more than had booked seats. It also introduced a temporary one-way 89 pound ($137)-fare, half what a ticket would usually cost if booked at the last minute. "Problem is," says Holligan, "there are only so many seats."

Those who can't find tickets for one of those coveted seats have been heading to the ports of Dover in England and Calais in France to book passage on ferries crossing the Channel-which has been churning with jam-packed ships going back and forth around the clock. Passengers have waited as long as three hours in Calais to buy tickets.

French operator SeaFrance, which was on strike a few weeks ago, experienced a 120 percent rise in car bookings and received reservations for 108 buses on the first night of the ban alone. Phones at Dover-based P&O Ferries, a subsidiary of DP World, have been ringing off the hook-as many as 400 calls every 15 minutes.

Demand for crossing tickets was so high, the company's web site crashed. "We have never seen anything like this before," says Michelle Ulyatt, a spokeswoman for Dover-based P&O Ferries, a subsidiary of DP World. Over seven days, the company's 7-ship fleet transported 30,000 passengers traveling without cars, she explained, compared to around 2,000 most weeks.

The train to the bus to the ferry to the...

Another beneficiary of the volcano's disruptive eruption: buses. Ferry companies have chartered dozens of them to shuttle passengers back and forth from the rail stations to the port. The airplane-stranded have scrambled to scoop up bus tickets. Eurolines, Europe's leading coach company, experienced a 600 percent rise in traffic on lines between London and Paris, Dublin, Amsterdam and Brussels.

Customers with deeper pockets are hiring cabs. Addison Lee, a minicab company in London, has deposited dozens of corporate clients, says spokesman Alistair Laycock, from London to the mainland. The farthest destination this past week: a 600-mile jaunt from London to Milan. The price: about 3,000 pounds (roughly $4,700). "We have to look after our clients. If they have a meeting in Amsterdam, we have to get them there," he says. That hasn't been easy or cheap. On the Milan trip, Addison Lee sent two drivers. "In all honesty, we're more profitable when we run out of London," says Laycock.

Using social media to match up the bespoke and stranded

Hertz International, which is experiencing a seven-fold rise in demand for one-way rentals, is solving the same problem creatively. Hertz's president Michel Taride reports that 3,500 of the company's rental cars are outside the country they were rented in-a car rented in Rome, he says, ended up 1,300 miles away in Stockholm.

To get the cars back to where they started, the company is using the web, Twitter and Facebook to match up stranded passengers with one another. "We hope our good service will surprise customers and that it will make them loyal to us," he says, adding that the company opted to cancel one-way drop-off fees, instead of raise them. For the short term, that is.

Those that couldn't find a way home have sought refuge where they were stranded. But hotel rooms were difficult to find, especially affordable ones. Many hotels near John F. Kennedy International Airport reported 100% occupancy and at the 165-room Hotel Tryp Barcelona Aeropuerto only three junior suites, at 260 Euros a night, were available through the end of next week.

But did hotels make a killing from the volcano? Not necessarily, since cancellations offset gains made by those that were stranded, according to one hotel executive who wished to remain nameless.

Some of the 'volcanoed' are getting VOIP'd

Teleconferencing firms, on the other hand, got a boost as a result of the air traffic disruption. "I got volcanoed," says Paul Dickinson, the CEO of the Carbon Disclosure Project, a greenhouse reporting organization, who could not travel to Beijing from London to interview three job applicants. He ended up interviewing all three-and hiring one- via Cisco's TelePresence technology. "I realize now that you can even appoint someone remotely," he says. "That's pretty transformative."

Cisco (CSCO, Fortune 500) vice president and TelePresence general manager Charles Stucki, who was stuck in London en route to Oslo, struck a new teleconferencing milestone: he closed the $3.3 billion acquisition of Tandberg, a Norwegian videoconferencing firm, via teleconference. Cisco also took advantage of Europe's volcanic moment to drum up new customers with discounted offers to try out the equipment. So far, the results haven't been tallied, says Stucki.

Bridge-Talk, a video and audio conferencing firm based in Tel Aviv, got concrete results: 80 new clients, most of them Israeli executives who couldn't get to scheduled meetings in Europe and had tried out its services for the first time. "Many customers told us they will no longer travel unless it is essential," says CEO Scott Curzon.

Even businessmen in Iceland see a bright spot in the dark plume spewing out of the ground. "Iceland has never had this much publicity," said Jon Olaffson, chairman and founder of Icelandic Glacial, a bottled water company, who had just made his way back to Reykjavik from Paris. "We will try to capitalize on the moment." On his to do list: a marketing campaign to promote his certified natural water from Ölfus Spring, a spring formed during a massive volcanic eruption more than 4,500 years ago. Bottled water from Eyjafjallajokull, anyone? To top of page

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