Although many of Europe's carriers are assembling their compensation applications for losses resulting from the11 September terror attacks, there is still uncertainty over what they will actually be able to claim for, and when any money will arrive.

The European Commission (EC) issued the emergency measures it considered appropriate on 10 October. The main feature was that compensation would be allowed for losses "resulting directly from the four-day closure of American airspace".

Most of the measures were approved by European Union transport ministers a week later, but calls from the Association of European Airlines (AEA) for a longer compensation period, spearheaded by intense lobbying from its member carriers, fell on deaf ears. AEA estimates its member airlines will suffer losses of €2.5 billion ($2.2 billion) in the rest of 2001 arising from the terror attacks, with 108 aircraft grounded and up to 20,000 jobs lost.

It will now be up to the airlines to present their bills for compensation to their national governments. Some states are expected to be more generous than others - but to ensure a level playing field, the EC will examine all requests. It is expected that it will need to consider a large number of detailed submissions to judge what can, and what cannot, be claimed for. All this will take time.

The International Air Carrier Association (IACA), which represents Europe's charter airlines, itself lobbied for some latitude over a strict interpretation of the four-day compensation rule. This was needed because its carriers felt the effects well after 15 September, said director general Marc Frisque.

It took until 21 September for some IACA members to bring stranded passengers back to Europe. In addition, Israeli airspace was closed and extra security measures at European airports caused aircraft to be diverted well after US airspace was re-opened. For example, one European airport increased its security clearance time from 45 to 300 minutes.

According to IACA, this view has been recognised by the EC which now says it will consider compensation for losses resulting from the "immediate consequences" of 11 September. Charter carriers have seen bookings this winter fall on average between 20 and 40%, with bookings to destinations in North Africa down by 50-70%. So far, the prospects for summer 2002 are not rosy either, with worries about booking levels and the likelihood of price reductions.

It will be difficult for regionals, many of which lost significant transfer traffic that would have come from transatlantic carriers, to make a case for compensation, admits the European Regions Airline Association. Larger carriers affiliated to majors are expected to follow the lead set by their parents in making claims, but many smaller ones are expected not to bother as the prospects of any reward might be slim.

Source: Airline Business