ASH CLOUD: IATA puts cost to airlines at $1.7bn

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IATA has put the cost to airlines of the volcanic ash cloud at $1.7 billion, and is calling for various forms of regulatory relief to help the industry recover.

The crisis impacted 29% of global aviation and affected 1.2 million passengers a day, says IATA director general Giovanni Bisignani.

"The scale of the crisis eclipsed 9/11, when US airspace was closed for three days," he adds.

Although the grounding of flights for six days meant airlines were able to save on a daily fuel bill of $110 million, the crisis has still been "devastating" for an industry which lost $9.4 billion last year and is expected to lose a further $2.8 billion this year, says IATA.

Bisignani praises London Heathrow and Dubai airports for waiving parking fees and not charging for repositioning flights, and is calling for other airports to follow suit.

However, his main requests for help with airline recovery are aimed at governments. He is calling for 'use it or lose it' slot rules to be relaxed, along with night flight restrictions in order to afford carriers "every opportunity to get stranded passengers back home as soon as possible".

IATA also wants Europe's passenger care regulations to make an exception for the ash cloud situation.

"This crisis is an 'act of god' - completely beyond the control of airlines. Insurers certainly see it this way. But Europe's passenger rights regulations take no consideration of this," says Bisignani.

"The regulations were never meant for such extraordinary situations. It is urgent that the European Commission finds a way to ease this unfair burden."

IATA is also keen to see governments compensate airlines for lost revenues, on the grounds that the ash cloud crisis was "an extraordinary situation exaggerated by a poor decision-making process by national governments". The EC has already said that airlines could be in line for compensation under a financial aid package similar to that which was made available to airlines following the 11 September 2001 terrorist attacks.