While the Icelandic volcano with the roll-off-the-tongue name of Eyjafjallajökull continues to erupt, its impact on European air travel is winding down for the moment. The lockdown on the skies is starting to break, and flights are starting to resume. The skies will be divided into three sectors: a blocked zone immediately in the path of the ash cloud, a “danger” zone where flights are permitted within restrictions, and a third zone that’s free for air travel.

When all was said and done, over 80,000 flights were canceled. An estimated $1 billion were lost by airlines. And the effects in lost work days, ruined vacations, and fallen-through business deals have yet to be calculated, especially since it’s going to be weeks before all the backlogs are fully worked out of the system. (On the flip side, despite the output of ash and gases by the volcano, the shutdown of air travel in Europe reportedly reduced the daily carbon dioxide by over 206,000 tons.)

So what are the longer term consequences of this event?

1. Customer Service: Identifying Winners and Losers
The volcano didn’t play favorites. But airlines varied in their reaction to the crisis. Some offered several days’ hotel stay reimbursements, others didn’t. Some communicated frequently with those travelers who provided their correct contact info; most didn’t. The variation between carriers is now leading to an endless barrage of first-person stories in the media — even in the venerable BBC. Reputations are being made — and broken — as we speak. (Whether those reputations translate into sales is another issue.)

2. Bailouts!
If an industry loses a billion dollars in 2010, you can count on that industry running to the governments for a handout. Expect the airlines to beg for cash. Consumers aren’t as well-organized; if they were, you would see lobbying for rebates, tax credits, etc.

3. Engines and Ashes: Who Flies?
While moving people around the continent stopped, moving planes didn’t end entirely. Several carriers successfully tested low-altitude flights below the cloud — without passengers — to see whether the low levels ash in the air at those flight levels would damage aircraft engines. (Recall that volcano ash can shut engines down completely.) The tests were successful. Now, airlines are arguing that European regulators have ignored the data from test flights and have unnecessarily extended the suffering of passengers — and airlines. Expect blue-ribbon panels, months of debate, and continued research into the effects of ash.

4. More Sales of Travel Insurance
For the tens of thousands of travelers who were stuck, travel insurance might not have helped them get home, but it might have covered some of their costs. Might. With such a large swath of the population displaced, you can expect an uptick in sales of travel insurance products. Be sure to do two things before you make such a choice: a) Be sure to check your own credit card’s features before you start shopping for another card. You might be covered already. (Offhand, I’m aware that a handful of Citibank cards and the Visa Black Card still have this feature.) b) Read the fine print. Every single time.

5. European Travel… on Sale?
An admittedly unscientific poll of friends and co-workers yielded a nearly-unanimous result: Travel to northern Europe isn’t in the cards this summer. “Too risky. Who knows if the volcano will ruin your vacation?” Demand will slip. And that means deals. If you haven’t made summer holiday plans, perhaps it’s time to give northern Europe a second look. But, as mentioned earlier, give travel insurance a look, too, if you take the plunge.

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