Aid Likely For European Airlines.

The European Commission has confirmed a limited package of state aid designed to compensate European airlines for direct losses following the 11th September terrorist attacks. (10/10/2001)

As part of an emergency package of measures, the EC says it will cover some insurance costs and allow the public sector to pay for extra security measures.

While announcing the package of measures, EU Transport Commissioner Loyola de Palacio said the EC reserved the right to make further proposals in the future.

The US has already outlined plans to compensate its airlines with a $15bn package of grants and loans.

European budget airlines have argued against such measures, although Ray Webster, chief executive of easyJet, has let it be known that he feels that the airline industry should not have to bear the extra insurance costs arising from the attacks on the US.


Michael Bishop, chairman of BMI British Midland, also told the BBC Radio 4 ‘Today’ programme this morning that he hoped the EC would “not grant state aid to failing airlines”.

But it is not just the smaller airlines that are making their feelings known; Germany’s Lufthansa has complained to the EU`s competition watchdog over a EUR 125m (USD 114.1m) bridging loan from the Belgian government to bail out Sabena. Sabena is still waiting for approval from the European Commission of its loan.

Reports today say that Irish carrier, Aer Lingus, is also facing a major financial crisis.