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5 European airlines face bankrupcy

Thu 22th Apr 2010

More than five European airlines risk bankruptcy after the volcanic ash cloud halted traffic, the head of the International Air Transport Association (IATA) said on Tuesday.

"More than five mid-size and small European companies risk shutting down because they lack cash," Giovanni Bisignani said during an interview on Italian national television, the ANSA news agency reported.

Bisignani said he would ask the European Union to authorise governments to reimburse airlines whose planes have been grounded.

Faced with a growing crisis after almost a week of cancellations and disruption caused by the ash cloud from a volcano in Iceland, airlines are losing some 200 million dollars per day, according to IATA, which represents airline companies.

Airlines "will not raise ticket prices because of competition" Bisignani said.

Brussels announced on Monday that it would be prepared to allow EU nations to offer such financial aid to their airlines, on the condition that it was warranted and did not amount to a subsidy by the back door.

EU Transport Commissioner Siim Kallas met with industry officials Tuesday, his spokeswoman Helen Kearns said.

Meanwhile, the likes of P&O Ferries and Brittany Ferries along with Eurotunnel have earned the confidence of the travelling public after years of experiencing a declining market. It only remains to be seen if they can turn this situation to their advantage in the long-term.

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