Lessons Learned - The Volcanic Ash Air Crisis

(excerpted from article of same title by Irene Korn published in the Q2 2010 NBTA Business Travel Quarterly)

Following are some areas that showed up as weak spots for many corporations. How did your company measure up during the crisis? Do you have an up-to-date crisis management plan? Is there a clear chain of command in the event of a similar travel disturbance? What are your expectations of your travel management company? What are your expectations of your airline and other supplier partners? Can you quickly and accurately pinpoint the location of all travelers? Can you communicate quickly and effectively with your travelers? What impact does your current travel policy have on your travelers’ ability to adjust itineraries in a crisis? Are there allowances in place to permit unplanned additional expenses for travelers? Does each department within your company have a plan in place to manage a stranded traveler’s work load? Do you have a plan to address the weak spots discovered?

Just when you think you’ve got contingency plans in place for everything, we’re reminded that the unexpected is just that – unexpected. The volcanic ash that closed down much of European air space this spring brought crisis management planning to the forefront for travel managers.

The effects of the volcanic ash were staggering:

• 7 million passengers experienced disruptions
• 100,000 flights were grounded
• $1-2 billion in overall financial losses
• 80% of all companies affected
• $200,000 average cost per affected company
• 160 travelers stranded on average per company
• 5,600 corporate meetings cancelled
• 165,000 business trips cancelled

(figures from NBTA Foundation survey of NBTA-affiliated companies)

This ash cloud was the largest transportation disruption in Europe since World War II. A crisis of this magnitude proves the value of travel management. “The immediate lesson is the power of travel management at work. Travel managers worked extended hours over many days to accommodate those who were stranded,” said Mike McCormick, NBTA executive director and COO.

“It was an interesting event in the fact that it was primarily transportation related and it wasn’t a safety/security issue. It really changed some dynamics around who led the charge and how organizations’ crisis management plans dealt with the issue,” said Bruce MdEndoe, president of iJet Intelligent Risk Systems.

Partnering with travel management companies (TMCs) and airlines became crucial in the efforts to not only accommodate travelers, but communicate with them. “The communicating piece is almost impossible to over-emphasize,” said Douglas DeBaltzo, senior vice president of supplier management and corporate travel services for Bank of America. To expedite communication in the future, one change DeBaltzo has already incorporated is the creation of communication templates. “The next time the leadership team needs information, we can pop the pertinent information in and it will take us 10 minutes instead of a couple of hours.”

Another outcome at Bank of America is the creation of a new system called “Watch, Warning, and Alert.” “Depending on the severity of the incident and the number of travelers impacted, we now have criteria around how engaged we are early in the process,” said DeBaltzo.

In addition to analyzing their own responses to this travel disturbance, companies are looking at the role their supplier partners played and ways partnerships can be strengthened. “If the airline is taking the lead on communicating that flights have been cancelled and here’s the rebooking, should I also be doing that or should I recognize that this is the role of the supplier and build my process beyond that. There’s greater opportunity from an industry perspective for us to work together and really understand each other’s crisis management philosophy and process – and then take a look at our own to ensure we’re not duplicating,” said Bottner.