EU backs aid plan to airlines hit in ash crisis

But EU Transport Commissioner Siim Kallas, speaking after talks with fellow commissioners, said the support would have to be directly related to a loss caused by the closure of air space.

It would not be allowed to amount to "unfair assistance" undermining competition.

Airlines racked up losses due to the shutdown of European air space and the loss of thousands of flights.

They have also been obliged under EU rules to pay for accommodation and meals for their passengers stranded around the world.

Carriers are now pushing for national government bail-outs which would have to be sanctioned by Brussels if they amount to state aid.

Mr Kallas said national authorities could press ahead with non-state aid airline support if they wished, such as temporary loans and guarantees at market rates.

"Certain support measures could also be envisaged as state aid from member states to make good damage caused by natural disasters or exceptional occurrences." But he warned: "It (state aid) cannot be used to allow unfair assistance to companies which is not directly related to the crisis."

Mr Kallas also emphasised that air passenger rights will continue to be subject to "co-ordinated enforcement", adding: "There must be a level playing field so that one company does not get unfair advantage over another by failing to fully meet its obligations.

"The commission will work closely with national authorities to ensure the regulations are applied in a consistent way."

The Transport Commissioner also called for "a single European regulator for a single European sky" to improve the joint response to what was an unprecedented problem.

The eruption of the Icelandic volcano caused the cancellation of more than 100,000 cancelled flights and more than ten million passengers were unable to travel by air.

Mr Kallas put the cost to European airlines, airports, ground handlers and tour operators at between 1.5bn-2bn euros (1.3bn-1.7bn).

He said: "Since the beginning, passengers have been our first priority and my message to industry has been very clear – EU passenger rights must be fully respected.

"Now, as we are getting back to normal our focus can shift to relief measures for the industry so that the air transport sector can weather this crisis."

He said the closure of European airspace – a decision by national authorities and criticised by airlines as an over-reaction – justified temporary flexibility in applying existing rules and policies to ease the pressure on airlines and help with "immediate cash flow problems".

The commission is also recommending member states and Eurocontrol to "assess immediately the possibility to defer the actual payments for en-route charges for a defined period of time".

And the commission says it will not object to member states

which "waive operational restrictions" – flight restrictions – until a full return to normality of air networks and the repatriation of all stranded passengers.

Chief executive of budget airline EasyJet Andy Harrison said: "The commission acknowledges that the five-day closure of European air space was a result of the forces of nature and, like all natural disasters, only governments have the resources to deal with the consequences.

"We hope that the response from governments to compensate airlines will be speedier than their response to the volcanic eruption.

"Governments also need to ensure that this doesn't become an excuse to subsidise weak airlines."