Ray of hope for airlines hit by war

European Union regulators are considering relaxing competition rules to help airlines cope with the war in Iraq, which the industry fears will add £6bn (€8.8bn) to its losses, officials said today.

The proposals would allow governments to cover the costs of extra security measures and loosen restrictions that oblige airlines to give up under-used routes to rivals.

EU spokesman Gilles Gantelet also said regulators would turn a “favourable eye” on airline alliances on particular routes to cut overcapacity.

But the EU says the impact of the Iraq crisis on the airline sectors is not yet sufficiently serious to warrant direct government compensation payments, or governments taking on insurance costs.

Such measures were adopted to help airlines through the crisis that followed the September 11, 2001, terror attacks on the United States.

The International Air Transport Association last week warned airlines could lose a further £6bn (€8.8bn) because of the war, on top of about £20bn (€29bn) in accumulated losses since the September 11 attacks.

The EU’s head office is expected to approve the proposals tomorrow and put them to transport ministers from the 15 EU nations meeting in Brussels on Thursday.