Europe's airports 'to close in days'

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Europe's airports 'to close in days'

Industry asks for aid as war insurance cover runs out

Mark Milner and Andrew Osborn in Brussels

Saturday October 13, 2001 The Guardian

Europe's airports could be forced to close within days as measures to bolster their war risk insurance in the wake of last month's terrorist attacks run out, according to a leading industry association. "The severely reduced insurance cover for acts of terrorism or war currently proposed by insurers is inadequate and risks closing the doors of Europe's airports within days unless a solution can be found," the Airports Council International has said.

Insurers cut the amount of cover available for airports from $1bn to between $5m and $50m per incident in the immediate aftermath of the attacks on New York and Washington but governments stepped to provide emergency cover.

Once those arrangements come to an end, however, "airport operators will have little choice but to consider it impossible to continue to operate on such a basis," according to the ACI, which represents some 450 airports in Europe handling around 90% of commercial traffic.

The ACI is angry with the European commission because it claims it is underestimating the scale of the problems ahead. It says the commission believes the risks for airports have not increased in the same way as they have for airlines where emergency insurance cover has been extended.

"The harsh reality of the situation, however, is that the insurance industry does not currently appear to share the commission's view," the ACI said.

It is calling for an immediate assessment of the insurance crisis threatening Europe's airports and wants the emergency cover underwritten by national governments to be extended significantly.

Philippe Hamon, the director general of ACI Europe said yesterday: "In order to complete... a detailed assessment and to allow appropriate measures to be implemented, the emergency insurance cover presently underwritten by national governments should be extended for at least another 6 months."

BAA which operates seven airports in the UK - including Heathrow and Gatwick - said that government underwriting arrangements would remain in force in the UK until October 29 and the company was reviewing what would happen after that.

Meanwhile European airline leaders yesterday claimed US rivals were abusing a £10bn government aid package to slash fares on transatlantic routes.

They demanded further state aid in a bid to cope with the worst crisis in the industry's history, arguing that direct losses resulting from the terrorist attacks on the US on September 11 extended beyond the four days in the immediate aftermath of the atrocities - for which Brussels has already cleared government support.

"Member airlines have evidence that the American carriers are cutting transatlantic fares in an attempt to stimulate demand.

"In normal times that would be understandable with so many empty seats but they are doing it with vast sums of money in their pockets which have only just been handed out to them," David Henderson, a spokesman for the Association of European Airlines, said.

An AEA delegation made the plea for more aid in a meeting with the European Union's transport commissioner, Loyola de Palacio, in Brussels yesterday, arguing the period covered by state support should be extended to at least 10 days.

The Lufthansa boss Jürgen Weber said he expected his own airline, Air France and British Airways to weather the crisis but said the fate of other European flag carriers could hinge on the level of state support.

"The future will show whether Iberia, KLM and Alitalia survive or are shared out among larger players. Without aid it will come to that kind of consolidation," he added.

http://www.guardian.co.uk/airlines/story/0,1371,573286,00.html

-- Martin Thompson (mthom1927@aol.com), October 13, 2001


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