European airlines could sue government agencies for grounding air traffic due to safety fears over a volcanic ash cloud if they are not compensated for losses by their own countries, some lawyers have said.
Lawyers believe airlines, which industry body IATA says have lost $1.7 billion in the crisis, could bring lawsuits against government agencies. Solicitors said they expected to see 'a raft of class actions brought by airlines and companies' against government agencies if a compensation deal was not agreed.
They said the damages from such lawsuits could 'break the billion pound mark'.
For the latest on air travel disruption click here
The European Union's competition chief said the European Commission may allow EU governments to give aid to airlines hit by losses but if that does not happen carriers will likely look at other ways to recoup lost cash.
Europe's skies were re-opened today after the continent was cut off from most of the world for five days due to an ash cloud from an Icelandic volcano that spread over northern Europe, stranding millions of travellers and paralysing businesses.
But with so many planes having been grounded by the volcanic ash from Iceland, it could take days or even weeks to clear the backlog. About 75% of flights in Europe will operate today, some 21,000 of the 28,000 flights normally scheduled each day, European air traffic agency Eurocontrol said.
German airline Lufthansa said it would not apply for compensation but British Airways, which has lost around £100m sterling in revenues because of the crisis, called on the EU and national governments to compensate airlines to help them cope with the impact the shutdown.
The British carrier added that compensation was paid after the closure of US airspace following the 9/11 attacks and that the impact of the current situation was 'more considerable'.
But Ryanair chief executive Michael O'Leary said he would wait for his day in court after insisting his airline will defy rules on full compensation for stranded passengers.
He warned customers that Ryanar will not be held liable for their hotel and restaurant bills after state agencies across Europe shut down airspace for six days.
Mr O'Leary said Ryanair would reimburse travellers the original price of their air fare and no more - a blatant refusal to abide by strict EU consumer rules.
'There's no legislation designed that says any airline getting a fare of €30 should be reimbursing passengers many thousands of euro for hotel accommodation. It's absurd,' he said.
He said consumer travel rules for airlines should be updated to put planes on an equal footing with bus, train and ferry operators with the carrier only liable for the original cost of a fare.
Aer Lingus and Ryanair have both given estimates of how much the disruption to air traffic caused by volcanic ash will cost them.
Ryanair said its net profit for the year to the end of March 2011 could be hit by around €6m a day over the seven days of the flight disruptions between last Thursday and today. Aer Lingus had estimated that the disruption caused by the Icelandic volcano eruption has cost the airline between €15m and €20m.
Meanwhile, the Commission for Aviation Regulation has urged passengers making claims for reimbursement of expenses arising out of flight disruptions, to be reasonable and apply a common sense approach.
The Commission has urged passengers to save all receipts, records, booking references and flight details for claims.
