=20 ---------------------------------------------------------------------- This article was sent to you by someone who found it on SFGate. The original article can be found on SFGate.com here: http://www.sfgate.com/cgi-bin/article.cgi?file=3D/n/a/2005/03/16/financial/= f101446S91.DTL --------------------------------------------------------------------- Wednesday, March 16, 2005 (AP) Airlines Blame EU for Pushing Up Costs (03-16) 10:14 PST BRUSSELS, Belgium (AP) -- European Union regulations cost its airline industry 5.9 billion euros ($7.89 billion) a year, the International Air Transport Association said Wednesday. IATA Director General and CEO Giovanni Bisignani said at a news conferen= ce that governments and the EU head office have not done enough to help the industry, "or worse, they have done too often the wrong things." The IATA estimates that new legislation forcing airlines to increase compensation for denied boarding, cancellations and delays will cost 600 million euros ($802 million) this year. Bisignani said that was "an optimistic number" due to the inclement weather that affected flights over the past month. He acknowledged compensation for overbooking is fair. But the IATA has launched legal action claiming airlines cannot be held responsible for air traffic delays and weather conditions. War risk insurance and security issues cost airlines 1.9 billion euros ($2.54 billion), which the IATA says should be covered by governments. Approximately 3.4 billion euros ($4.55 billion) has to be spent dealing with inefficient market organization and regulation of the industry, the association said. "This is a clear burden on the competitiveness of European airlines," sa= id Bisignani. The IATA has been pushing for a unified and regulated air navigation system to cut down on operating costs and fuel emissions. Airlines have also asked that airports be subject to regulation, instead of being allowed to decide their fees on the basis of their desired profit. They also complain that European rail continues to receive subsidies even though airline subsidies were eliminated. According to the IATA, the German government makes a profit of 11 euros ($14.70) for every 1,000 passenger kilometers traveled by air from taxes and fees, but the government pays 51 euros ($68) for the same distance traveled by rail. Air traffic has finally increased to 8.8 percent above 2000 levels, but yields have dropped by 10 percent in the same amount of time, the association said. ---------------------------------------------------------------------- Copyright 2005 AP