EU agrees limited help for airlines hit by Iraq war, no major bailout

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EU agrees limited help for airlines hit by Iraq war, no major bailout

BRUSSELS, Belgium (AP) =97 European Union nations agreed Friday to relax=20
regulations and help airlines cope with heavy financial losses connected to=
=20
the Iraq war, but said there was no need for a major bailout. "Right now,=20
there's nothing on the agenda about giving millions in aid," said French=20
Transport Minister Gilles de Robien. Instead, the ministers agreed to=20
loosen restrictions that oblige airlines to give up underused routes to=20
rivals. Airlines had appealed for such a move to allow them to cut flights=
=20
to the Middle East and other sensitive routes during the crisis without=20
having to relinquish those takeoff and landing slots permanently. The=20
European Airlines Association estimates the Iraq war could add $2.5 billion=
=20
to its members' losses. Worldwide, the International Air Transport=20
Association last week warned that airlines could lose $10 billion because=20
of the war,  on top of $30 billion in accumulated losses since the Sept.=20
11, 2001, attacks on the United States. Despite those forecasts, the EU=20
ministers said the situation was not sufficiently grave to warrant the sort=
=20
of handouts or insurance guarantees offered after the Sept. 11 attacks.=20
European airlines said they were not yet pushing for such help. However,=20
they said governments should be ready to step in if insurance companies=20
sharply hike premiums as they did after Sept. 11, or if U.S. rivals secure=
=20
bailouts from Washington. "If our competitors in the global marketplace are=
=20
using the opportunity to achieve government-supported restructuring ... and=
=20
therefore gain an unfair competitive position over European airlines, we=20
will resist this at the highest political level," said Ulrich=20
Schulte-Strathaus, secretary general of the European Airlines Association.=
=20
French minister de Robien said European governments would keep a close eye=
=20
on any state handouts that put EU carriers at a disadvantage. "If there is=
=20
a distortion of competition by the actions of outside countries, then we'd=
=20
have to see what we'd do," he told reporters.


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