Cost Of Volcanic Ash At EUR€1.5-EUR€2.5 Bln - EU

April 27, 2010

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The volcanic ash cloud from Iceland could have led to overall costs of EUR&euro1.5 billion - EUR&euro2.5 billion euros (USD$2 billion - USD$3.3 billion) for the grounded European aviation industry, the European Union's transport chief said on Tuesday.

"We have taken all assessments and valuations of costs from all the different stakeholders and we are working with a number between EUR&euro1.5 and EUR&euro2.5 billion euros," European Transport Commissioner Siim Kallas told a news briefing.

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.

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

"Now, as we are getting back to normal, our focus can shift to relief measures for the industry," Kallas said. "This is about practical measures to provide relief to the air transport sector so they can weather this crisis."

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.

(Reuters)