The International Air Transport Association (IATA) has estimated that airlines lost $1.7 billion in revenue during the six days the eruption of a volcano on Iceland spewed ash across the continent, completely closing airspace in the UK and severely disrupting operations throughout the northern part of Europe.
But while the European Commission appeared to encourage member states to “make good” the damage to the airline industry caused by the volcano under provisions for state aid in the event of natural disasters or exceptional circumstances, it also warned its members to heed Europehan Union policy against inconsistent or discriminatory application of the aid among various states. So effectively, the Commission still has to make it completely clear to EU member states the extent to which they can help to patch up holes in airline balance sheets resulting from the crisis caused by the volcanic ash emergency.
Whatever the response, it does appear that the EC has decided that the extraordinary circumstances of the volcano justifies direct support measures, a conclusion applauded by IATA, for one, and no doubt welcomed by the airlines affected. The EC is likely to require member states to give prior notification of any aid they intend to give to carriers.
IATA director general and CEO Giovanni Bisignani said his members are not looking for so-called bailouts but do expect governments to compensate them for costs incurred from an emergency that was beyond their control. These costs would include loss of revenue and the provision of accommodation and food for passengers.
On May 4, EU transport ministers agreed on a number of “priority areas” for action, including a desire to “fast track” the Single European Sky (SES) air traffic management program. “We need a single European regulator for a single European sky,” said Siim Kallas, vice president of the European Commission, responsible for transport. “This would not solve every problem. But it would mean a much faster coordinated response in a crisis. Major SES elements will be in place by the end of 2010, including a crisis cell.”
Kallas has argued that had the SES structure been in place during the ash crisis, Eurocontrol would have been able to more effectively coordinate the closure and reopening of air space than national air traffic management agencies.