British Airways, other airlines seek EU bailout for ash crisis

British Airways, other airlines seek EU bailout for ash crisis
London, Paris:  British Airways says airlines have asked the European Union for financial compensation for the closure of airspace.

The British airline says it is losing as much as as 20 million pounds ($30 million) per day since the volcano erupted last week, sending up an ash cloud that has grounded aircraft for five straight days.

British Airways chief executive Willie Walsh says the situation is extraordinary. He says European airlines have asked the EU and national governments for financial compensation for the closure of airspace.

Walsh says there is a precedent - because compensation was paid after the closure of US, airspace following the September 11, 2001 terrorist attacks.

The world's leading airline industry group criticized European governments on Monday for using scientific theory -- not fact -- in their decisions to close large swaths of European airspace because of Iceland's volcanic ash cloud.

The International Air Transport Association has expressed its "dissatisfaction with how governments have managed it, with no risk assessment, no consultation, no coordination, and no leadership."

"It's embarrassing, and a European mess," IATA CEO Giovanni Bisignani told The Associated Press. "It took five days to organize a conference call with the ministers of transport and we are losing $200 million per day (and) 750,000 passengers are stranded all over. Does it make sense?"

European civil aviation authorities were holding a conference call Monday about what steps could be taken toward opening airspace. Transport ministers of Britain, Germany, France and Spain were to hold another later in the day.

One transport minister suggested EU policymakers couldn't get their act together. Dominique Bussereau of France told reporters Monday that he had urged EU president Spain ever since Saturday to call the ministerial meeting over the weekend -- but Madrid declined.

"Naturally, it would have been better if had taken place Sunday or Saturday," Bussereau said.
The International Air Transport Association, in a statement, urged governments to place "greater urgency and focus on how and when we can safely reopen Europe's skies" -- such as through more in-depth study of the ash cloud.

"We have to not just use -- as the Europeans were doing -- a theoretical model, let's try to use figures and facts," Bisignani said." It means sending test planes at certain kinds of altitudes to check what was the situation with the ashes."

While the association says "safety is our top priority," Bisignani said in the statement that its member airlines have run test flights with no problems and "they report missed opportunities to fly safely."

French Environment Minister, Jean-Louis Borloo, who is the No. 2 in France's Cabinet, said disparate analyses needed to be brought together based on "real tests on real planes with real pilots" so some air "corridors" could be reopened.

"The issue today is not to reopen all European commercial airspace, the issue today is to increase the ability to reopen corridors to allow the general de-congestion of European traffic," he told reporters.

"The desire of France -- without taking risk -- is to open corridors as much as possible and as quickly as possible," Borloo added.

IATA's Bisignani said that Europe -- unlike the United States, for example -- is "not well-equipped" when it comes to planes that can test the air quality in the skies.

He estimated that once flights in Europe do resume, it would take three to six days for traffic to return to normal.

The prospect of continued losses and flight cancelations pushed shares of German airline Deutsche Lufthansa AG lower on Monday in Frankfurt trading, dropping by as much as 5.9 percent before it gradually eased off to €12.22, down 4 percent.

Likewise Air Berlin PLC's shares were down 3.8 percent to €4.06 in Monday morning trading.

Story First Published: April 19, 2010 17:29 IST

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