Ash cloud could cost airlines over £2 billion

The EU's transport commissioner says airlines could have lost more than £2 billion as a result of the Icelandic ash cloud that grounded flights for nearly a week.

Siim Kallas, said the figure had been arrived at after discussions with the various parties involved.

"We are working with the amount, we have taken all evaluations and assessments of costs from different stakeholders and different organisations. We are working with a number between 1.5 to 2.5 billion euros," he told a news briefing in Brussels.

The estimate covers all sectors of the aviation industry, hit by the cancellation of around 100,000 flights, including airlines, airports, tour operators and ground handlers.

As an economist, Kallas said he would treat industry estimates with scepticism as he tried to ascertain the final bill.

However, while he said the exceptional circumstances of the flight ban may justify some level of state aid to the airlines, he warned they would not be fully compensated.

Siim said: "State aid is not miracle. You must clearly understand that there is not a sack of money, somewhere available which is waiting for such type of crisis."

Kallas made his comments as he presented a range of actions to help the aviation industry recover from the crisis and to avoid a repeat.

In the short term, EU member countries will be allowed to waive some flight restrictions, and might also be able to defer route charges to help airlines cope with their immediate cash-flow problems.