EC signals approval of state aid for airlines hit by ash crisis

The European Commission today signalled approval of state aid for airlines in the wake of the volcanic ash crisis – as long as it does not amount to “unfair assistance” undermining competition.

Airlines claim to have lost billions due to the closure of European air space and the loss of thousands of flights. They have also been obliged under EU rules to pay for accommodation and meals for their passengers stranded around the world.

Now the carriers are pushing for national government bail-outs which would have to be sanctioned by Brussels if they amount to state aid.

EU Transport Commissioner Siim Kallas, speaking after talks with fellow commissioners, said national authorities could press ahead with non-state aid airline support if they wished, such as temporary loans and guarantees at market rates.

He went on: “Certain support measures could also be envisaged as state aid from member states to make good damage caused by natural disasters or exceptional occurrences.”

But he warned: “It (state aid) cannot be used to allow unfair assistance to companies which is not directly related to the crisis.”

Mr Kallas also emphasised that air passenger rights will continue to be subject to “co-ordinated enforcement”, adding: “There must be a level playing field so that one company does not get unfair advantage over another by failing to fully meet its obligations. The Commission will work closely with national authorities to ensure the regulations are applied in a consistent way.”