European airlines are working to create their own insurance fund to cover war and terror-related risks, responding to a vacuum in commercial coverage in the aftermath of the September 11th attacks.
The Association of European Airlines, a body grouping the continent's airlines, has outlined a plan under which the fund would provide €1.7 billion per incident for the airlines' third-party liability, according to a document published on its website.
The fund will be financed by a common ticket surcharge of 50 cents, provided all airlines join, the document said.
The AEA called on EU governments to complement the plan by covering damages above €1.7 billion, and an industry source said the EU member states' existing guarantees would have to be extended for at least another six months.
European Union governments stepped in to provide the cover needed to keep airlines flying after commercial insurers effectively withdrew following the hijack attacks in the United States.