TORONTO - Canada's air travel industry is losing up to $4 million a day on flights grounded by volcanic ash clouds in one of the world's busiest flight corridors, airline analysts estimate.

"This is totally unprecedented in the history of the airline business," said airline analyst Robert Kokonis of travel consultancy Air Trav Inc., who estimated that after five days of disruptions, Canada's air travel industry has lost nearly $20 million in revenue from would-be passengers.

"The problem is this volcano couldn't be situated any worse... the transatlantic air corridor is infinitely busier than the North Pacific air corridor."

European Union transport ministers agreed Monday to partly reopen northern Europe's skies amid sharp criticism by the international airline industry that governments were foot-dragging.

The International Air Transport Association said the shutdown is costing about $200 million per day, but Kokonis says the impact is more widespread.

Airports, shipping companies, tour operators and travel agents are also suffering from the loss of would-be travellers to Europe as they continue to see flights to the continent cancelled.

Kokonis suggested if the disruptions continue, there could even be layoffs at airlines and airports because of reduced service.

"If this goes on much more than another few days, I think we're going to see (some international operators), starting with some smaller carriers, shut their business," Kokonis said.

As Canada's most frequent European flyers, Air Canada (TSX:AC.B) and Air Transat (TSX:TRZ.B) have seen the biggest impact from the disruptions. WestJet (TSX:WJA) did have to cancel or delay some flights in and out of St. John's, N.L., Monday, but due more to heavy fog than the threat of volcanic ash.

Air Canada is losing about $2.6 million each day on about 36 grounded daily flights that would be carrying about 6,500 passengers, Kokonis estimated. It also stands to lose another $400,000 a day in lost cargo revenue. Kokonis estimated tour operator Air Transat was losing close to $750,000 a day.

Karl Moore, a business professor McGill University who follows the airline industry, estimated that Air Canada would lose over $2 million a day and pegged Air Transat's loss at about $750,000.

He said any residual losses to the industry after all customers have flown will likely be passed on to consumer's ticket prices.

"If you look at the fees from the airports it's a couple thousand dollars per plane...and it's serious money for Transport Canada, which they will pass on to you and I."

Rick Erickson, of airline consultancy RP Erickson & Associates, said the airlines will end up taking a hit on about 10 to 15 per cent of the revenue they are losing each day because most travellers that are not flying now, will still fly with them when service resumes.

Canadian airports, especially Toronto, Montreal and Vancouver, which see the busiest European traffic, are losing money in everything from landing fees to concession purchases. And travel agents who book corporate clients flying last-minute are also losing out, Kokonis said.

Jeff Element, President of Travel Inc., which owns European tour operator Contiki Tours, says the disruptions have already cost the company thousands as it tries to accommodate hundreds of affected customers.

"Coaches are sitting there idle and hotels have been booked and we're on the hook for a lot of this stuff... I don't have any estimates yet, but the longer this continues on, the more costly it will get for us."

Still, losses are not as severe as they might have been, given that the disruption happened just before the peak European travel season, which begins in May.

David Tyerman, an airline analyst at Genuity Capital Markets, said while European flights make up about 20 per cent of Air Canada's revenue, investors will likely pay more attention to the impact of the economic rebound on the airline industry than a short-lived act of God.

"Unless this drags on for months and months, it's probably going to be a fairly small blip on the radar," he said.

Shares in Air Canada rebounded from a five per cent drop earlier Monday to close at $2.50 while Air Transat shares closed down 12 cents to $13.47 on the Toronto Stock Exchange.