Iceland Eyjafjallajokull Volcano Eruption Black Swan Event

The eruption of the Eyjafjallajokull volcano in Iceland is the type of disaster that is a true black swan event. Black Swan events as described by Nassim Nicholas Taleb are the existence and occurrence of high-impact, hard-to-predict, and rare events that are beyond the realm of normal expectations. Black Swan Events were described by Nassim Nicholas Taleb in his 2007 book, The Black Swan.

The Eyjafjallajokul volcano eruption is now causing havoc on the island nation of Iceland as well as worldwide chaos with air travel. The volcanic ash emitted from the volcano is made more dangerous to aircraft by being mixed with water from a melting glacier as it is violently ejected into the atmosphere. The resulting fine ash contains glass like particles that can shut down aircraft engines when sucked into aircraft jet engine compressors. Aviation experts say the volcanic plume has caused the worst travel disruption Europe — and the world — has ever seen.

As of late Friday and Saturday morning there was no end in sight to the disruption. The ash plume from the volcano, which is under a glacier known as Eyjafjallajökull, drifted south and east across Europe causing airspace closures and the cancellation of an estimated 16,000 of Europe’s 28,000 flights Friday, officials said. The situation is even worse today. The airlines are already losing an estimated $200 million per day in lost revenues and expenses with no end in sight.

The ash cloud from the volcano is not only causing havoc for European airports and airlines. For example, in today’s connected world travelers are being stranded in far away Australia as flights to Europe are canceled. Flights from the United States to Europe have been sharply curtailed with tourists being forced to cancel vacations and business travelers missing meetings. Even heads of state who had planned to travel to Poland to attend the funeral of the Polish president killed in a recent air accident are being force to cancel their trips. Even if the volcano stopped spewing ash today, which is highly unlikely, it would take at least a week for air travel to resume at normal levels as aircraft and crews are out of place all over the globe and it will take a huge expensive effort on the part of the airlines to regroup and to reestablish normal schedules.

According to an Asia-based aviation analyst the level of flight disruptions grounded about half of the daily cargo volume between Asia and Europe. About 7,000 tons of goods are flown daily on average from Asia to Europe and an additional 4,000 tons from Europe to Asia, the analyst estimated, involving mostly electronics, luxury items and perishable goods such as fruits, vegetables and meat. Should disruptions continue there are concerns about possible shortages of some products.

Volcano experts seem to have no real idea as to how long the eruption can continue. The last time that the Eyjafjallajokull volcano erupted was in 1821, almost 200 years ago. It is not reassuring that the 1821 eruption continued for well over one year. Hrafn Gudmundsson, a forecaster at the Iceland Meteorological Office, said high-level winds would be constant through Saturday afternoon, carrying ash to the east and southeast. “No one knows, of course, how the volcano will develop, so that’s the big question.”

“The activity has been quite vigorous overnight, causing the eruption column to grow,” Icelandic geologist Magnus Tumi Gudmundsson told The Associated Press on Saturday. “It’s the magma mixing with the water that creates the explosivity. Unfortunately, there doesn’t seem to be an end in sight.”

Unfortunately, Iceland seems to be a small nation that attracts catastrophic black swan events. Iceland was the first nation to meltdown during the worldwide financial chaos of 2008. The nation is still struggling under a debt load that is completely unmanageable. Iceland seems primed for further disaster. Iceland is a nation of only 320,000 people that sits on a large volcanic hot spot in the Atlantic’s mid-oceanic ridge and has a history of devastating eruptions. One of the worst was the 1783 eruption of the Laki volcano, which spewed a toxic cloud over Europe, killing tens of thousands.

As the Laki volcano is only some 16 miles from the Eyjafjallajokull volcano some experts fear that the present eruption could spread to include the Laki volcano. Should that event occur a flock of black swans would be unleashed upon Europe and the world. Should the volcanos erupt simultaneously and the eruptions continue for a year or more not only would the major airlines of the world spiral into bankruptcy but the disruption to world travel, world trade, and in weather patterns would be catastrophic.

In the highly connected modern world black swan events, such as volcanic eruptions occurring within the boundaries of a tiny island nation, could have disastrous consequences for us all.