Iceland erupts
 

No, not the economy this time. I see JB has picked it up but it would appear that Eyjafjallajoekull, some distance east of Reykjavik, has erupted and Icelandic airspace was originally closed but is now just restricted. I believe the last volanic ash incident there was in 2004.

There was not much disruption then, just re-routings around the ash cloud which soon got 'rained' down into the sea.

Through various ATC sources, I do believe there have been a few scenarios based upon Icelandic eruptions practiced over recent years at SCATCC/Shanwick, each one getting larger in scope. Long overdue eruption anticipated, though don't know if it's the peak you quote BOAC that is the main problem. Scenarios range from minor diversions, through oceanic turn-back a la 9/11, to full closure of UK/Oceanic Airspace. I believe, that is; I may be wrong.

Maybe others more qualified and knowledgeable than I could comment.

The effect on air travel is dependent on how high the ash goes and what are the dispersion patterns. The altitude part is known typically within the hour, the dispersion paths and altitudes (stratifications) take some weather gurus and satelite imagery to develop over days

My motto is "if you don't know than don't go"

Experience since Pinatuba has demonstrated that the tracking is now very tightly controled and flight crew awareness much better.

Indeed - the 2004 'event' was almost a 'non-event' for flying. The cloud was closely followed.

Icelandic coast guard flew with scientists to the volcano and made a video: click for airborne video 1
There is also a ground based video available: click for video 2 (at night)
More information can be read here.

http://www.icelandreview.com/iceland...00x100_gos.jpg

http://www.icelandreview.com/iceland...2010-01_he.jpg

New and hitherto unknown volcanoes also appeared in N Germany and W Russia according to today's met package (Sig Wx) charts.