Airline body seeks moves to reopen Europe airspace
PARIS (Reuters) - Airline industry group IATA called on Monday for steps to reopen European airspace shut down by a volcanic ash cloud and the European Commission said it may approve compensation for airlines losing $250 million a day.
IATA head Giovanni Bisignani criticized authorities in Europe who he said had "missed opportunities to fly safely."
"This volcano has crippled the aviation sector, firstly in Europe and is now having worldwide implications. The scale of the economic impact (on aviation) is now greater than 9/11 when U.S. airspace was closed for three days," Bisignani said, referring to the September 11, 2001 attacks in the United States.
"We must move away from this blanket closure and find ways to flexibly open air space, step by step," he told a news briefing in Paris.
Airline shares fell in early trade on Monday and the European Union's competition chief Joaquin Almunia said the EU Commission is considering loosening stringent rules for state aid to help airlines hit by the flight cancellations.
"I am looking carefully at what we did after September 11. We can use similar instruments. We are indeed facing exceptional circumstances," he said.
After the September 11 attacks the Commission allowed aid to compensate airlines for losses directly resulting from the attacks and made it easier for airlines to coordinate capacity.
European transport ministers are due to discuss the airspace crisis at 9 a.m. ET after a meeting of the European aviation control agency Eurocontrol, which said on Monday it expected between 8,000 and 9,000 flights to operate in Europe.
That would represent just 30 percent of normal flight traffic, compared to earlier predictions by European Union officials that half of flights could be operating on Monday.
Over the weekend only a fifth of normal flights were flown and figures released by Eurocontrol show 80,000 fewer flights in Europe since Thursday compared to the same period a week ago.
Austria opened its airports on Monday but other countries kept no-fly decrees in place. Italy closed its northern airspace after briefly opening it on Monday.
Millions of passengers have been stranded by the closure of most of Europe's airspace, and trade has also been hit.
Businesses dependent on fast air freight have felt the early impact of the disruption. Kenya's flower exporters said they were already losing up to $2 million a day. Kenya accounts for about a third of flower imports into the European Union.
In export-reliant Taiwan, the island's two major international carriers China Airlines and Eva Air said they had canceled a total of 14 cargo flights to four European airports since Thursday.
In Britain, companies reported staff had been unable to get back from Easter holidays abroad and hospitals said they were cancelling some operations because surgeons were stuck abroad.
Britain's official weather forecaster the Met Office released a graphic predicting little movement of the ash plume over Europe on Monday, but saw it spreading toward the eastern seaboard of North America.
"The wind flow is staying very much the same through the day. Probably for the next three or four days the wind regime is not going to change terribly much," a Met Office spokesman said.
Bisignani called for urgent action to safely re-open airspace and called for a meeting of the International Civil Aviation Organization, the United Nations aviation body.
"We have to make decisions based on the real situation and not on theoretical models. They (the authorities) have missed opportunities to fly safely," he said.
A senior European Union official said on Sunday the current situation was not sustainable, as airlines called for a review of no-fly decrees after conducting test flights at the weekend without any apparent problems from the ash cloud.
"We cannot wait until the ash flows just disappear," said EU Transport Commissioner Siim Kallas, adding he hoped 50 percent of European airspace would be risk-free on Monday.
Dutch airline KLM, which has flown several test flights, said most European airspace was safe despite the plume of ash, and dispatched two commercial freight flights to Asia on Sunday.
RULE BOOK
Volcanic ash is abrasive and can strip off aerodynamic surfaces and paralyze an aircraft engine. Aircraft electronics and windshields can also be damaged.
Glass build-up was found in an engine of a NATO F-16 fighter plane, underscoring the dangers to aircraft flying through the ash cloud, a senior U.S. official said on Monday.
The official did not identify the location or the exact time of the incident or the nationality of the aircraft.
Some airline industry officials complain the response to the threat from the ash has been out of proportion, saying volcanoes in other parts of the world cause less disruption.
Senior Eurocontrol official Brian Flynn said on Sunday the International Civil Aviation Organization published global rules and guidelines for interpretation at continental level.
"One could say that the guidelines are interpreted slightly more rigorously in Europe than in the United States, when it comes to responsibilities of air traffic control agencies and pilots," he told Reuters.
Iceland's Meteorological Office said the erupting volcano sent further strong tremors throughout the surrounding area on Monday but ash production had fallen.
The ash plume which has caused air traffic chaos has descended to an altitude of about 2 km (1.2 miles), compared with 11 km when it began erupting on Wednesday from below the Eyjafjallajokull glacier.
British Prime Minister Gordon Brown said Britain would deploy three Royal Naval ships including an aircraft carrier to bring home citizens. British travel agents' association ABTA said it estimated 150,000 Britons were stranded abroad.
"At no time in living memory has British airspace been shut down and affected this many people," said a spokeswoman.
The crisis is having an impact on international diplomacy, with Pakistani Prime Minister Yusuf Raza Gilani becoming the latest leader to abandon a visit to Europe. A joint IMF and European Union mission to Greece was also delayed.
For travellers, businesses and financial markets, the biggest problem is the unpredictability of the situation.
Economists say they stand by their predictions for European growth, hoping normal air travel can resume this week.
But if European airspace were closed for months, one economist estimated lost travel and tourism revenue alone could knock 1-2 percentage points off regional growth. European growth had been predicted at 1-1.5 percent for 2010.
"That would mean a lot of European countries wouldn't get any growth this year," said Chatham House senior economic fellow Vanessa Rossi. "But the problem is it is incredibly hard to predict what will happen. Even the geologists can't tell us."
Disruption spread to Asia, where dozens of Europe-bound flights were canceled and hotels from Beijing to Singapore strained to accommodate stranded passengers. In Tokyo, Japan Airlines said it had canceled 44 European flights so far and All Nippon Airways put its cancellations at 27.
Many U.S. airline flights to and from Europe were canceled.
Russian airports remained open, routing planes to North America over the North Pole to avoid the ash cloud.
(Reporting by London, Geneva, Dublin, Paris, Amsterdam, Brussels, Reykjavik, Washington, Frankfurt and Berlin newsrooms; Writing by Dominic Evans; Editing by Matthew Jones)
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