Shares in European airline and travel stocks fell heavily on Monday as ash from an Icelandic volcano looked set to bring much of Europe to a standstill for a 5th straight day.
Shares in European carriers like BA, Lufthansa and Air France-KLM and travel-related stocks like TUI, Thomas Cook, Accor and Kuoni all came under pressure.
It was not all bad news, with rail and ferry operators across Europe seeing demand soar as people desperately tried to travel across the continent with most major airports shut or operating severely limited services.
The International Air Transport Association warned on Friday that daily losses due to the crisis could top $200 million a day if things do not improve and where very critical of the intergovernmental response.
"We are far enough into this crisis to express our dissatisfaction on how governments have managed it - with no risk assessment, no consultation, no coordination, and no leadership," Giovanni Bisignani, IATA's Director General and CEO, said.
"This crisis is costing airlines at least $200 million a day in lost revenues and the European economy is suffering billions of dollars in lost business.
In the face of such dire economic consequences, it is incredible that Europe's transport ministers have taken five days to organize a teleconference," he added.
The CEO of regional airline Flybe, Jim French, told CNBC that losses are mounting and criticized EU regulations that had stopped airlines flying in areas where the ash cloud had not yet impacted.
Governments need to repeal laws that force airlines to pay out to customers during a crisis, French told "Squawk Box Europe." French added that he would fly tomorrow if the rules allowed it and wants governments across Europe to help airlines meet the costs created by the crisis.
John Strickland, a Director and airline specialist at JLS Consulting says this is a highly complicated issue to deal with.
With losses mounting, Strickland believes airlines need to be wary of safety given any accidents would be very bad for carriers reputations.
But other analysts say this could be good for the industry in the long run.
It doesn't really matter if a load of badly-run, highly indebted airlines go out of business, Michael Browne, a portfolio manager at Sofaer Global research, said.
Some players going out of business would speed up much needed consolidation in the aviation industry, Browne told Squawk Box Europe.
Hitting Second-Quarter Growth?
With the International Air Transport Association warning that the airline industry is losing upwards of $200 million a day due to the travel chaos being caused by an Icelandic volcano, investors are asking just how much the crisis will hit second quarter growth across Europe.
Airlines are clearly taking a big hit, much of which they will never see again, according to Bob McKee, chief economist at Independent Strategy.
McKee though says while airlines and airports are losing out, rail and shipping companies are making hay and that will offset the impact of air travel disruption at a macro level.
Disruptions would have to go on for another two to three weeks for there to be a meaningful impact on Europe's second quarter gross domestic product, according to McKee, who believes even prolonged chaos would only shave 0.2 percent off euro zone GDP.
There could be factory closers if international trade continues to be hit, Browne said. A number of non-financial firms have very little cash in the bank and with inventories already low, Browne believes just the loss of one component in the supply chain could have a major impact on smaller firms.
Browne, who was out buying frozen vegetables over the weekend amid fears UK shops could run out of greens and imported fruits this week, said the crisis could not have come at a worst time for Europe.
With only potatoes and winter barley being harvested at this point of the season, Europe is highly dependent on imports from Africa and the rest of the southern Hemisphere.
Others, though, back McKee's view that there will be little or no impact on the wider economy.
Alan Miller, the founding partner at Spencer-Churchill Miller Private, told CNBC.com that while the airline stocks will be impacted, he believes there will be little or no impact on other sectors.