WRAPUP 12-EU ministers strike deal to restart flights

Mon Apr 19, 2010 3:36pm EDT

* EU transport chief says steps in place by 0600 GMT

* IATA had called for opening; losses worse than 9/11

* Volcano spewing less ash, more lava (Adds Dutch flights, German comment, background, detail)

By Pete Harrison

BRUSSELS, April 19 (Reuters) - The European Union reached a deal on Monday to gradually lift flight restrictions imposed because of an ash cloud from an Icelandic volcano, under pressure from frustrated airlines losing $250 million a day.

It will go into force from 0600 GMT on Tuesday and countries were quick to declare their airports open to try to stem losses described as worse than those suffered when the United States closed its airspace after 9/11.

"From tomorrow morning we should see more planes flying," EU Transport Commissioner Siim Kallas told reporters after EU transport ministers held a video conference.

German Transport Minister Peter Ramsauer said: "On a national and European level, we have decided to move step by step toward a normalisation, within the framework of strict security requirements."

In the Netherlands, where KLM (AIRF.PA) had run test flights at normal cruising altitude since Saturday, passenger flights were taking off from Amsterdam's Schipol Airport on Monday night.

Airlines had declared numerous test flights problem-free, but experts have disagreed over how to measure the ash and who should decide it is safe to fly. A British Airways jet lost power in all four engines after flying through an ash cloud above the Indian Ocean in 1982.

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Under the agreement, the area immediately around the volcano -- hurling more steam and less ash into the sky on Monday -- will remain closed.

But flights may be permitted in a wider zone with a lower concentration of ash, subject to local safety assessments and scientific advice, the European aviation control agency Eurocontrol said in a statement.

"In time, it should be possible to move towards an approach in which full discretion is given to aircraft operators," it added.

AIRPORTS OPENING

France said it was reopening some airports to create air corridors to Paris. Romania also opened its airspace.

Eurocontrol said it expected only 8,000 to 9,000 flights to operate in Europe on Monday, just 30 percent of normal volume, stranding hundreds of thousands of passengers and delaying cargo deliveries.

The European Commission said it might approve compensation and ease stringent state aid rules to cushion airline losses from the shutdown, which has sent shares in the sector tumbling. EU ministers are also due to discuss the economic impact.

"The scale of the economic impact (on aviation) is now greater than 9/11, when U.S. airspace was closed for three days," International Air Transport Association (IATA) head Giovanni Bisignani said. He said airlines were losing $250 million a day in revenue.

"We must move away from this blanket closure and find ways to flexibly open air space, step by step," he said. [nLDE63I0GA]

British Airways BAY.L, which says it has lost 15-20 million pounds ($22-30 million) a day in revenue, said it had asked the EU and national governments for compensation.

Millions of people had travel disrupted or been stranded and forced to make long, expensive attempts to reach home by road, rail and sea, as well as missing days at work.

Canadian oil worker Mark Bokenfohr told the BBC of a five-day quest to travel the 1,700 km (1,000 miles) home to Bergen, Norway from Italy, where he had been on a business trip.

He queued four hours for a train ticket, changed train five times to get to a port in Denmark, then caught a ferry to Stavanger in Norway. From there he clubbed together with four others to hire a car to Bergen.

"My faith in human kindness is renewed," he said. "I met many, many displaced air passengers along the way. We were packed into train carriages like sardines, and not everybody made it onto the trains."

VIRTUAL MEETINGS

Communications provider Cisco Systems (CSCO.O) said companies were turning to videoconferencing to connect executives stranded by the flight ban.

"You will not get a demo room in any of the Cisco facilities," said Fredrik Halvorsen, head of Cisco's TelePresence Technology Group. "We have seen a huge spike in usage."

In sport, soccer's European Cup holders Barcelona set off on a two-day road trip of nearly 1,000 km on Sunday to play Inter Milan in a Champions League semi-final on Tuesday.

"Lucky for me, I have my laptop and I could still do some work," David Hampson, a humanitarian worker from Manchester, England, told reporters while waiting for a KLM flight at Manila's international airport. About 25,000 travellers to Europe are stranded in the Philippines.

Britain is deploying three navy ships including an aircraft carrier to bring its citizens home from continental Europe. The British travel agents' association ABTA estimated 150,000 Britons were stranded abroad. Washington said it was trying to help 40,000 Americans stuck in Britain.

Businesses dependent on fast air freight are feeling the strain of five days of restrictions.

Kenya's flower exporters said they were already losing up to $2 million a day. Kenya accounts for about a third of flower imports into the European Union.

"Everything (is being) pushed back down the pipeline," said Greg Knowler, editor of Cargonews Asia in Hong Kong. "The freight forwarders are actually sending stuff back to the factories ... One German forwarder that's based here reckons they have 4,000 tonnes of backlog in Hong Kong."

While the immediate impact on Europe seemed to be abating, Porter Airlines Inc, a small regional Canadian airline, cancelled its first flight out of Newfoundland, as a precaution due to forecasts that ash could spread to Canada's east coast.

Britain's Met Office, the national weather service, said the ash cloud had reached the Canadian seaboard on Monday, but that the prevailing wind was set to shift, preventing the cloud from extending over more of Canada and the United States. (Reporting by London, Geneva, Dublin, Paris, Amsterdam, Brussels, Reykjavik, Washington, Frankfurt and Berlin newsrooms; Writing by Dominic Evans and Alison Williams; Editing by Kevin Liffey)

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