Newspaper article The Evening Standard (London, England)

London Is Paying; the Terrorist Crisis: Airlines: Industry at Odds over the Need for Government Handouts

Newspaper article The Evening Standard (London, England)

London Is Paying; the Terrorist Crisis: Airlines: Industry at Odds over the Need for Government Handouts

Article excerpt

Byline: MARK BENHAM;NIGEL ROSSER

THE AIRLINE industry was today accused of exploiting the US terrorist hijackings as an excuse to ask for government handouts.

Budget airline Ryanair said poorly-performing rival carriers were already planning severe cutbacks and suggested they were seizing on last week's attacks to request financial assistance.

Michael O'Leary, a spokesman for the Irish carrier, said today: "I think there were going to be large job losses among airlines that were losing money before last week. Last week's event's may have brought them forward."

He told BBC Radio 4's Today programme that Ryanair was "not very battered at all" by the impact of the attacks and was taking the same number of weekly bookings as before. "People are still flying and we see no reason why that will change," Mr O'Leary said.

The stinging criticism from inside the industry comes as British airlines are pressing for substantial government assistance to counterbalance a severe drop in passenger numbers and rising security and insurance costs.

British Airways yesterday announced a further 7,000 job cuts as part of an emergency response to the hijackings. Ministers are today preparing for emergency talks with the airlines in an attempt to prevent services from being halted on Tuesday. Leading carriers have warned they may be forced to ground their planes unless the Government offers help with covering insurance risks after the terrorist attacks in the US.

To keep flights going, ministers are examining emergency measures, including a scheme that would see the Government underwriting commercial airlines' insurance.

Transport Secretary Stephen Byers could use arcane laws drawn up during the war, which allow the Government to become the insurer of last resort in times of conflict.

The laws were designed to protect the merchant navy from financial ruin in times of war. Airlines around the world claim underwriters had given notice they would cancel cover for war liabilities from midnight on Monday. Such a move would mean airlines and insurance companies would have to renegotiate the terms of cover in the light of the possibility of US military action. …

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