British Airlines (Hansard, 13 December 2001)

§ Mr. Byers

I have decided to provide up to £40 million of financial assistance to compensate airlines for losses arising directly from the 11 September terrorist attacks in the United States. Qualifying airlines will now be invited to submit claims under this scheme. I have placed a copy of the scheme conditions in the Library.

Compensation under the scheme will cover lost revenue over the period during which airspace was closed. It will also compensate for additional costs incurred during that period, such as (but not limited to) airport and airspace charges, costs incurred in transporting passengers from their diverted destination to their intended destination, additional operating costs of diverted aircraft and additional crew costs.

In making this decision I have had regard to the views of many hon. Members who have written to me, of their constituents, of the airlines and of the trade unions. I accept that the circumstances, which are consequent both 1014W on the terrorist attacks and on the subsequent decisions affecting airspace, are indeed exceptional and therefore merit exceptional assistance.

The Government have worked with their European partners to minimise distortions to the single market, and have therefore supported guidelines which limit airline compensation to cover these exceptional circumstances.

The assistance I am offering will help airlines at a time when passenger numbers on services between the UK and US, and therefore revenues, are still significantly below their pre-11 September levels, but without distorting competition or relieving airlines of the need to take appropriate measures to meet the changed conditions in the market. The UK is giving a lead in the EU in announcing a scheme of financial assistance in respect of the closure of US airspace, just as it was the first to provide third-party war risk insurance when the market failed.

Assistance under this package is in conformity with Commission guidelines on state aid, and I have notified the Commission of my intention accordingly.