P O Neill of Fistful of Euros compares The volcano crisis and the financial crisis:
Are the two crises alike? Consider the similarities. In each, an unexpected event in a forgotten part of the system ends up having global ramifications. The unexpected event occurs in a system that needs constant motion for its effective operation: as long as the securities/passengers can be moved on to the next stage, the system keeps functioning. When one part of it stops working, the rest quickly breaks down. But there’s more.
Both the finance and airline industries have to balance the tension between 2 parts of their business: the “utility”, the bit that people and governments view as an essential service (payment systems and getting people from A to B) and the rest of the business model that has grown up around that, and at least in the good times, where the big profits are made. And although both industries have seen a progressive loosening of government oversight in the last 3 decades, it takes just one crisis to show how quickly the leash can be suddenly pulled back.
Finally, each crisis does a good job of revealing the hidden assumptions: we buy pieces of paper because we’re confident we’re able to sell them, and we get on a plane to somewhere because we’re confident we’ll be able to get back. Each industry built up its “illusion of liquidity”.
Then of course, there are the differences. We mentioned above the tightening leash on each industry as a crisis developed. That on airlines is much tighter. Even as banking systems seemed to be dragging down the world economy in late 2008, governments never gave any serious thought to suspending their operations. But the airspace was shut down not in the basis of a specific airplane event, but a worst-case scenario.
Second, in contrast to the G20-inspired rush to coordinate responses to the financial crisis, the response to the volcano crisis looks very ad hoc. Yes there are some pan-European agencies and the EU, but the ripple effects are all over the world and once one reviews the tales of woe, one sees that passengers are subject to the varied policies and rules for airlines, airports, hotels, visas, and travel agencies. In contrast to the concerns about “financial protectionism”, the airline business does not seem to have characterized by any assumption of equal treatment for all: the airline and the airport is still the flag carrier (even when privately-operated) and where you were when your journey got interrupted mattered a lot.