The European Commission today signalled approval of state aid for airlines in the wake of the volcanic ash crisis.
The commission said governments could provide support to the airlines as long as it does not amount to “unfair assistance” undermining competition. It put the cost of the disruption to European airlines, airports, ground handlers and tour operators at between €1.5 and €2 billion.
Airlines claim to have been worst hit by the closure of European air space and the loss of thousands of flights earlier this month as they have been obliged under EU rules to pay for accommodation and meals for their passengers stranded around the world.
Carriers are now 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.
“Certain support measures could also be envisaged as state aid from member states to make good damage caused by natural disasters or exceptional occurrences,” he said.
Mr Kallas warned state aid cannot be used to allow unfair assistance to companies which are not directly related to the crisis. He also emphasised that air passenger rights will continue to be subject to “co-ordinated enforcement”.
“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," he said. "The commission will work closely with national authorities to ensure the regulations are applied in a consistent way.”
Mr Kallas called for “a single European regulator for a single European sky” to improve the joint response to what was an unprecedented problem, with more than 100,000 cancelled flights and more than 10 million passengers unable to travel by air.
He put the cost to European airlines, airports, ground handlers and tour operators at between €1.5 and €2 billion. “Since the beginning, passengers have been our first priority and my message to industry has been very clear - EU passenger rights must be fully respected,” he said.
“Now, as we are getting back to normal our focus can shift to relief measures for the industry so that the air transport sector can weather this crisis.”
Mr Kallas said the closure of European airspace - a decision by national authorities and criticised by airlines as an over-reaction - justified temporary flexibility in applying existing rules and polices in order to ease the pressure on airlines and help with “immediate cash flow problems”.
After today’s meeting the commission said it was now recommending slot co-ordinators, who allocate take-off and landing slots, to ensure that airlines keep slots which were not used during the crisis.
The commission is also recommending member states and Eurocontrol to “assess immediately the possibility to defer the actual payments for en-route charges for a defined period of time”.
And the commission says it will not object to member states which “waive operational restrictions” - flight restrictions - until a full return to normality of air networks and the repatriation of all stranded passengers.
Responding, the Department of Transport said it will consider the commission's assessment and noted the commission may produce guidance on the application of the rules on state aid to carriers.
In a statement, the department said it will examine the commission's report and pointed out the issue will be discussed by transport ministers at the EU transport ministers' council meeting on May 4th.
Commenting today, Ryanair’s Stephen McNamara said: “We welcome Commissioner Kallas’s confirmation that EU governments must compensate their airlines for the losses suffered last week through the unnecessary closure of EU airspace, which was not the fault of airlines."
The carrier said it has written to the Department of Transport expressing its opposition to any State aid, and that it would "in time" be seeking from the Government of all refunds to passengers, both of air fares and any reasonable receipted expenses during the seven-day closure of EU airspace.
The carrier called a number of measures to be implemented , including deferral of price increases planned by the DAA airports from May 1st and the scrapping of the €10 tourist tax from the same date. Ryanair also called on the Government to limit the liability of airlines in cases where the problem is not within the control of the airlines.
PA