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Last Updated:  Friday, 28 March, 2003, 21:01 GMT
No cash handout for airlines
BA planes at Heathrow
Airlines can expect some help but no subsidies
European airlines will be offered only limited help to cope with a drop in business caused by the conflict in Iraq.

Transport ministers meeting in Brussels said they would not hand out cash to an industry that was already struggling.

European Union (EU) governments said they would give compensation if routes were cut because of airspace closures, help with extra security measures and consider stepping in if the insurance market withdrew cover.

"Our message is that we will not open the door to subsidies, that's quite clear," Greek Transport Minister Christos Verelis told reporters.

We can't simply stand by and watch and give up our markets to American carriers, that would be suicide
Christos Verelis, Greek Transport Minister

He said the EU would limit aid to the type of help provided after the September 11 terrorist attacks.

But he said the EU would act if it found other countries were unfairly propping up airlines on routes where they compete with European carriers.

Cancelling flights

Airlines in Europe have complained that their US competitors have used cash and loans from their government to cut prices on transatlantic routes.

"We can't simply stand by and watch and give up our markets to American carriers, that would be suicide," Mr Verelis said.

Airlines have suffered during the build-up to the war and since the conflict began.

Oil prices have been pushed up making their fuel bills higher, demand from passengers has dropped and some Middle East services have been cancelled.

The industry body Iata has estimated that airlines could lose a total of $10bn because of the war.




WATCH AND LISTEN
The BBC's Matt Prodger
"The knock on effect could be severe"



SEE ALSO:
US airlines fly towards extinction
27 Mar 03  |  Business
War forces airline cutbacks
27 Mar 03  |  Business
Brussels wins 'open skies' battle
05 Nov 02  |  Business
Q&A: Travel fears
19 Mar 03  |  Business


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