SIMON WARBURTON / PARIS
Commission is being asked to reconsider policy restricting compensation to just four days after 11 September attacks
France is trying to persuade the European Commission to rethink its policy restricting airline compensation to losses incurred during the four days following the 11 September terrorist attacks on the USA.
French transport minister Jean-Claude Gayssot wants Brussels to examine on a "case by case basis" whether state support can be given over and above the four-day rule. Only Portugal supported the possible change when the move was discussed at the European Council of Transport Ministers meeting on 16 October in Luxembourg.
Air France stands to be an immediate beneficiary of any last-minute largesse by the EC - the French flag carrier says it lost Fr390 million ($55 million) in September - and will now have access to what would appear to be the lion's share of an additional Fr360 million earmarked by Gayssot.
Aside from Air France, only newly formed Air Lib and charter operator Corsair have services to the USA. Other European carriers likely to benefit from any flexibility in EC grants may well be smaller airlines such as Aer Lingus, Sabena and TAP Air Portugal.
The Fr360 million is part of a wider plan already approved by the French parliament to spend an extra Fr2 billion on the airline industry following 11 September. Other elements of the bail-out include Fr220 million for passenger inspection and control, Fr300 million for airside access supervision and Fr800 million for extra hold baggage control. Half of the Fr2 billion will come directly from the taxpayer, while the rest of the aid will be made up with a Fr15 surcharge on ticket sales.
Ironically, the minister's intervention follows what he describes as "fare dumping" on transatlantic routes by US carriers following their access to federal funds, a practice he denounces as "unilateral and unfair".
EC transport commissioner Loyola de Palacio also weighed into the debate with a letter to US transportation secretary Norman Mineta complaining that the practice was "unacceptable".
The French subsidy moves have not met with unilateral approval. Lufthansa and British Airways (BA) lead the opposition to subsidies as a general principle.
The German airline says: "Compensation should not be employed to shift business risks from companies to the state and should not contravene subsidy regulations. A total of €11 billion ($10 billion) was paid during the 1990s to ailing national airlines - that must not be repeated."
For its part, BA says: "We are in favour of having a level playing field and we hope that the EC will enforce that."
The UK Government is expected to decide this week whether to pay BA compensation.
On the unrelated issue of the future of Air Lib and Montpellier-based Air Littoral after Swissair reneged on agreements to make payments to its ex-subsidiaries, Gayssot says: "All measures will be taken to allow these companies to pass through current difficulties."
Source: Flight International
