The European Commission is investigating ways it can help airlines overcome new insurance and security costs being imposed on them after the September 11 attacks.

European airlines believe they have lost about $4.5 billion in profit and about $6.2 billion in revenue.

Complicating the issue for the EU is the fact that member states are constrained from providing assistance to their national airlines. This hasn’t stopped the Belgian Government giving aid to its national airliner, Sabena, to keep it operating. Now several other airlines, including German giant Lufthansa and several budget operators, have claimed the assistance is anti-competitive.

The British Government is also trying to find a way of funding its airlines’ new insurance costs beyond October 30. At present it’s acting as insurer of last resort for the airlines through specialist insurer Global Aerospace. Now there is speculation that the airlines may be formed into a government-backed insurance pool, similar to the arrangement it has for properties damaged by terrorist action in Britain.

The Japanese and Indian governments are among the latest major governments to come to the aid of their airlines, extending guarantees of up to $1 billion in third-party insurance.