Etihad seeks EU payout for volcano ash cloud losses

Etihad Airways plans to seek compensation from EU authorities after flight ban cost it more than US$30m.

Etihad Airways plans to seek compensation from EU authorities after the volcanic ash-induced flight ban over Europe cost the carrier more than US$30 million (Dh110.1m), says James Hogan, its chief executive. The Abu Dhabi carrier will join a list of airlines based outside the EU that will claim redress after the six-day flight ban, which caused airlines to lose more than $1.7bn, says the International Air Transport Association (IATA).

"If there is an opportunity for non-European airlines to claim we'll be doing so," Mr Hogan said. The crisis disrupted flights of more than 22,000 Etihad passengers and put the airline under huge pressure, he said. Etihad is aiming to reach break-even next year after investing heavily in new aircraft and luxury cabins over its first six years in operation. At issue is whether European authorities mishandled the crisis, which began on April 14 when a volcano in Iceland erupted, resulting in an ash cloud that drifted east and covered European skies for almost a week. Ash has been known to cause engine failure in aircraft.

To date, the EU has issued proposals to allow state help for European airlines, such as emergency loans and postponement of charges. Richard Hill, the chief operating officer for Etihad, said the IATA was compiling a list of airlines based outside the continent that should be included in any compensation scheme. "We are on the list so we we'll see what happens next," Mr Hill said. IATA, which represents more than 230 airlines and 93 per cent of all scheduled airline traffic, has campaigned for its members to receive financial assistance.

Mr Hogan stopped short of criticising the way European authorities handled the crisis, but urged them to learn from the US Federal Aviation Administration, which created fly-through corridors in previous ash events. * with Dow Jones @Email:[e-mail]