Business picked up for some European regional airlines last week after falling by up to 40% in the days immediately following the terrorist attacks in the USA. But coupled with an already weakened economy, rising insurance costs and lowered liability payouts still signal an uncertain future - from which some regionals may not recover, but others could benefit.

British European, one of Europe's largest independent regional airlines, gained two new routes by the recent collapse of UK-based Gill Air. "I'd be surprised if there are not other casualties," says British European managing director Jim French.

Blame for any regional airline demises cannot be pointed only at the terrorist acts, French adds, but they could be "the catalyst which pushes them over the edge".

Low cost airlines experienced similarly dramatic falls in passenger traffic immediately after 11 September, followed by recovery last week. UK-based airlines Go and EasyJet say their passenger traffic plunged, by 20% and 26% respectively, but recovery was aided by special seat sales to "build momentum". The spectre of higher costs and uncertain revenues is unlikely to see EasyJet raising fares: "It's a hypothetical question, but we would probably reduce them to get people flying," says the airline.

The 11 September catastrophe will be a key area of discussion at the European Regions Airline Association (ERA) annual convention from 10-12 October in Athens. Among other points, ERA is calling for governments to pick up the tab for any mandated aviation security increase that results from the terrorist attacks. Funding any new requirements could help ease the airlines' potentially heavy financial losses, says ERA director general Mike Ambrose.

Ambrose also calls on European Union and member state governments to act cautiously in mandating new regulations that would raise airlines' costs or "destabilise the industry" such as environmental charges or en route navigation fees: "Give the industry a chance to achieve economic recovery before tinkering in an unnecessary way", he says.

Source: Flight International