BA attacks flight ban as UK firms lose millions

LONDON (Reuters) - British Airways on Monday called for a resumption of European air travel after a test flight revealed no evidence of damage from volcanic ash.

BA, low-cost rival easyJet <EZJ.L and travel operator TUI Travel said they were losing millions of pounds a day after the closure of most of Europe's airspace because of a huge cloud of ash from an Icelandic volcano.

BA said it had lost 15-20 million pounds a day in passenger and freight revenues over the last five days because of the closure of European airspace.

EasyJet said the crisis was costing it around 5 million pounds a day but that it still expects to post strong half-yearly profits.

KPMG warned on Monday that the shutdown would start causing serious difficulties for smaller airlines within days.

"If the shutdown of the airspace in the UK and large parts of Europe continues it will almost certainly lead to some carriers, especially those with a small footprint, becoming financially stressed," Ashley Steel, head of transport and infrastructure at KPMG, said in a statement.

Prime Minister Gordon Brown, who on Monday mobilized Royal Navy ships to help bring stranded Britons home, joined calls for the EU to compensate airlines.

Officials hope to significantly increase flights this week and the EU summoned ministers for talks as pressure builds for a solution to the five-day-old air crisis.

The fallout hit airline and travel firms' shares on Monday with BA down 4.5 percent and easyJet 4.2 percent lower by 1350 GMT. Europe's biggest travel firm TUI Travel and rival Thomas Cook were 3.7 and 4 percent down, respectively.

TUI Travel said the crisis had so far cost it some 20 million pounds in lost revenues and that daily costs would run at 5-6 million pounds.

The group said it was working with other tour operators and airlines to ensure a resumption of flights as soon as possible.

KBC Peel Hunt analyst Nick Batram said the cost for Thomas Cook is likely to be similar to that of TUI, adding that the impact on summer bookings was also a worry.

($1=.6233 Pound)

(Editing by Louise Heavens)