Europe’s airlines heading for a crash?

Airlines could face worse financial consequences today than after the 2001 9/11 attacks in New York, the International Air Transport Association (IATA) has said.

The shutdown of much of Europe’s airspace due to volcanic ash from Iceland is costing the industry an estimated 185 million euros ($250 million) a day, the group said.

The global Civil Air Navigation Services Organisation (CANSO) also announced that the air traffic control sector was losing up to 26 million euros ($35 million) a day due to the closure, while the Association of European Airlines warned that some airlines were not going to be in business next week if the situation continued.

On Monday, the European Commission said it was prepared to authorise exceptional financial aid to help airlines hit by the unprecedented cancelation of flights.

British Airways said that lost revenue and one-off charges linked to the volcanic ash cloud was costing it 17-23 million euros ($23-30m) a day.

German carrier Lufthansa, Europe's biggest airline, saw its stocks slump 2.7 percent on Monday, and costing the company up to 48 million euros ($64m), according to an estimate cited in BusinessWeek.com

Air France-KLM said that the group was losing 35 million euros ($47m) a day.

Scandinavia's SAS said the closure was costing it 5-9 million euros ($7-12m) a day, and said it would be forced to lay off some of its employees.

The low-cost British airline easyJet said it was losing around 6 million euros ($7.5m) a day, and that it had lost 45 million euros so far.

Airlines outside of Europe were also reeling from the airspace closures. Australia's Qantas said its losses totalled about 1 million euros ($1.4m) a day.