European airlines get a boost as EU drafts measures to protect industry

Associated Press

BRUSSELS, Belgium — European airlines could get longer government insurance guarantees covering terrorism and war risk and compensation for losses resulting from the attacks in the United States as part of an emergency package drafted by the European Union’s head office.

The European Commission report, to be presented Wednesday, also recommends public authorities assume the costs of stepped-up aviation security, according to a summary obtained by The Associated Press.

Recognizing the "serious difficulties" facing the industry, the commission, which enforces EU competition rules, promised relaxed scrutiny of efforts by airlines to coordinate schedules or maintain service on less-traveled routes.

It also said airlines would not have to worry about losing rights to airport slots next summer because of last month’s groundings, and promised to consider similar breaks for the winter season if the downturn in air travel lasts.

Under EU rules, airlines can lose an allocated slot if it is not used at least 80 percent of the time.

At the urging of European airlines, the Commission also will try to work out a "code of conduct" with U.S. authorities to avoid any "distortions of competition" on trans-Atlantic routes resulting from the $15 billion aid package Congress granted to U.S. airlines.

"The range of possibilities … will allow a concerted response from all the European states, preventing any discrimination among companies," transport commissioner Loyola de Palacio says in the summary.

Among the main proposals is an extension of the one-month government guarantee for war insurance agreed to after private insurers canceled all such policies one week after the Sept. 11 attacks.

While the Association of European Airlines had been pushing for six more months of coverage, the European Commission proposal would allow governments to extend the coverage until the end of the year.