EU moves to help aviation heal $3.3 billion losses

(AP) -- Europe should help its aviation sector recover from up to euro2.5 billion ($3.3 billion) in losses from the Icelandic volcano ash crisis by combining sweeping reform of air traffic control with short-term relief like lifting bans on nighttime flights, the EU's executive body said Tuesday.

The continent's air traffic control agency also has assembled a team of experts to determine whether authorities reacted appropriately to the ash threat, which airlines said did not warrant a lengthy closure of large chunks of airspace. The experts will carry out a comprehensive review of the actual threat posed to aviation by the ash cloud and of the effectiveness of airspace closure as a response.

EU Transport Commissioner Siim Kallas said the European Commission was asking member nations to provide airlines immediate relief with measures such as making 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 meant to maintain 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."

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

Kallas told reporters he had briefed the European Commission about the economic impact of the weeklong crisis. He said it had caused losses of estimated at between euro1.5-2.5 billion and included not just the airlines, but also 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 that the first elements of the so-called Single European Sky could be in place by the end of 2010.

Unified airspace would also put the 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. "In particular, the appointment of a European network manager before the end of 2010 is crucial."

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 the past 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, the meteorological data on the geographical spread of the ash cloud and its vertical distribution, and findings submitted by the 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.

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

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Associated Press correspondents Robert Wielaard and Raf Casert in Brussels contributed to this report.

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