Aviation lost up to $3.3 billion from ash crisis, EU seeks ways to help the industry

EU moves to help aviation heal $3.3 billion losses

BRUSSELS — Europe should help its aviation industry recover from up to euro2.5 billion ($3.3 billion) in losses from the volcanic ash crisis by reforming its air traffic control system, offering loans and suspending some rules like bans on nighttime flights, the European Union said Tuesday.

The continent’s air traffic control agency also assembled experts to determine whether national air authorities reacted appropriately to the ash threat, which airlines insist did not warrant a lengthy closure of large chunks of airspace. The experts will carry out a comprehensive review of the actual threat to aviation posed by the ash cloud and how effective closing an airspace really is.

The closure of a large chunk of European airspace due to the April 14 volcanic eruption in southern Iceland caused the cancellation of more than 100,000 flights and left 10 million passengers stranded.

EU Transport Commissioner Siim Kallas said the European Commission was asking its 27 member nations to give airlines immediate relief with measures such as market-rate loans and deferring payments for air traffic control services. Under normal circumstances, that would be considered illegal aid under EU rules.

Lifting restrictions on nighttime flights — a measure that maintains quiet in neighborhoods around airports — would help airlines repatriate stranded passengers and get delayed freight deliveries to their destinations, he said.

There should also be no loss of airports slots as a result of the ash crisis, Kallas said. Normally, slots assigned to an airline are forfeited if left unused.

“Now, as we are getting back to normal, our focus can shift to relief measures for the industry,” Kallas said. “The Commission is also proposing structural changes to ensure we do not face this situation again.”

Kallas warned EU member states not to grant airlines state aid other than loans at market rates or guarantees as a way of improving their immediate cash flow problems.

“This must be granted on the basis of uniform criteria established at the European level,” he said. “It cannot be used to allow unfair assistance to companies which is not directly related to the crisis.”

European airlines quickly supported the EU recommendations for governments to help the industry.

“We hope that the response from governments to compensate airlines will be speedier than their response to the volcanic eruption,” said Andy Harrison, chief executive of budget carrier easyJet.

“The Commission’s guidelines make a good and clear base for the industry’s continued talks about the financial consequences of the natural disaster,” SAS chief Mats Jansson said.

Kallas told reporters he had briefed the European Commission about the economic impact of the weeklong crisis.

Kallas said the weeklong crisis had caused losses of estimated at between euro1.5-2.5 billion and included not just the airlines but other aviation-related sectors such as tour operators.

Kallas has called an emergency meeting of EU transport ministers May 4 to fast-track the wholesale reform of Europe’s fragmented air traffic system.

“Europe needs a single regulator for a single European sky,” he said, adding it was crucial to have a European aviation manager appointed before the end of the year.

Unified airspace would put European skies under one regulatory body instead of leaving decisions to dozens of individual countries — one of the key sources of confusion in the volcanic ash crisis.

“This would have enabled a much more agile response,” Kallas said.

Europe’s independent air traffic management agency Eurocontrol — which groups 38 member states — also has been pushing for implementation of the Single European Sky concept, which has been under negotiation for two decades.

Its analysis of the threat to aircraft posed by ash exposure will be based on data collected from pilots’ in-flight reports, maintenance logs and post-flight checks, as well as meteorological data on the spread of the ash cloud and findings submitted by airlines and air traffic control centers.

Eurocontrol is also looking at establishing a crisis-management plan to deal much more aggressively with all other aviation-related emergencies, said Brian Flynn, deputy head of operations at the Brussels-based agency.

“These would include terrorist threats and other air safety issues such as health epidemics, and major social unrest,” he said.

Eurocontrol’s findings will submitted to the Montreal-based International Civil Aviation Organization, which is working to define for the first time a set of aviation safety standards for cases of volcanic eruptions.

German Transport Minister Peter Ramsauer said Tuesday that he sees “considerable need for action” on the EU level.

“We need consistent standards of measuring and consistent thresholds within the EU as opposed to a patchwork,” Ramsauer said.

He also said national and international flight controllers should work more closely together.

Associated Press correspondents Robert Wielaard and Raf Casert in Brussels, Jennifer Quinn in London, Malin Rising in Stockholm and Verena Schmitt-Roschmann in Berlin contributed to this report.