EU finance ministers have agreed to discuss the crisis facing European airlines when they meet in the Belgian city of LiΦge this weekend. Belgium's Finance Minister Mr Didier Reynders said yesterday that the ministers would discuss the impact of last week's attacks in New York and Washington on sensitive sectors such as airlines, insurance and energy.
Representatives from Europe's airlines will meet the EU Transport Commissioner, Ms Loyola de Palacio, in Brussels today amid mounting job losses in the sector. The Belgian airline Sabena warned yesterday that it could face bankruptcy unless its workforce accepted the loss of almost 1,500 jobs.
The US government has promised up to $15 billion (€16.1 billion) to support US carriers following last week's attacks, a step that Mr Reynders acknowledged Europe could not ignore. "If the US authorities find it possible to do something for their airlines, what are the consequences for Europe?" he said. Some airlines want the Commission to relax its rules governing state aid to airlines and to loosen competition law so that airlines could co-operate more closely. They are also likely to ask Ms de Palacio to postpone planned legislation that would oblige airlines to provide a better service to passengers and give priority to those who have been delayed.
A Commission spokesman warned that individual countries must not consider unco-ordinated action to support state airlines. "We cannot accept unilateral state aid from one country," he said.
The Commission is reluctant to change its rules, not least because other sectors such as energy and insurance have also been hit by last week's events. Some officials believe that airlines, many of which experienced a very poor second quarter, may be using the present crisis as an excuse to change the rules to their advantage.
Airlines argue that lower passenger numbers and the cost of extra security will hit profits but they disagree on what the EU ought to do. Some private airlines are reluctant to change the present system and others want "non-discriminatory" help in the form of tax relief.
Airlines throughout Europe have cut advertising budgets, shrunk fleets and slashed jobs this week as shares in the sector have fallen. Sabena's chief executive, Mr Christoph Mⁿller, said the situation could not be more grave. "If we don't react within two weeks, we are dead," he said.
Dutch carrier KLM said yesterday it would cut flights by October 1 by around five per cent on several routes, while Lufthansa said it was considering cutting jobs.
The Italian government is also mulling a proposal to lower sales taxes on air travel and aircraft fuel, ministry sources said.
Lufthansa spokesman Thomas Jachnow said yesterday it was too soon to give an estimate of the number of jobs losses, only one day after the company had said it would cut routes, but not jobs, as a result of the crisis. The airline has also reportedly postponed its order of up to 15 Airbus A380 superjumbos.
