Financial relief for European airlines comes to a head

Terrorism has found an unexpected ally in the game rules of Europe’s domestic finances. A soaring increase in the number of insurance policies issued on war risks and terrorist actions threatens to make several European airlines go belly up, aviation experts have recently warned.

Later last month, the European Commission called off the emergency plan that provided financial protection against war risks for airlines from the European Union’s member nations. As it was expected, the decision has kicked up a row since it will now be mandatory for those airlines to pay complete commercial fees to insurance companies for the first time after the 9/11 attacks in the U.S.

Legal experts believe last year’s terrorist attacks laid bare the airlines’ potential responsibility and the possibility on the part of relatives and companies to file lawsuits in case of material and human losses.

In the past, European air carriers could only cover responsibility for third parties over war risks as long as governments agreed to endorse the insurance policies by paying money in claim cases.

Last July, the European Union passed an extension plan in order to allow national governments to cover insurance costs, yet the EU now considers that the state-sponsored bailout is completely unnecessary.

Many are inclined to believe that a cost increase could not be absorbed by some airlines already drowned in financial shambles. Annie Redmil, an aviation expert, recently told BBC News that the new measure could have serious ripple effects all over the industry and even drag some companies into bankruptcy. However, Mrs. Redmil didn’t mention any specific carriers.

“Some of them will collapse. Even some big airlines could fall into bankruptcy,” the aviation expert asserted ominously. For their part, airlines are crying out and knocking on wood, but the measure has seemingly reached a point of no return.