A government bailout for airlines after Iceland volcano?

For six days, Lisa and John Hogan, and their 1-year old son, Simon, have been stuck in London – waiting to board a flight home to Australia.

Although airspace opened Tuesday at some airports in some parts of Europe – in France, Germany, and the Netherlands, for example – British skies remained mostly closed, and this, compounded with the massive backlog of flights, means that the Hogans, like hundreds of thousands of others, are still stranded.

Every extra day in transit, complains Lisa, is costing them “at least” 300 dollars, money they can ill afford. “What I want to know” says Lisa, is who is going to pay for all this?”

IN PICTURES: Iceland volcano

It’s a question on many lips now.

With airline losses from the volcanic ash cloud now more than 1 billion dollars, several leaders of the airline industry are demanding compensation from their own governments or from the European Union. They argue that the airlines were forced to comply with national edicts.

“This is an unprecedented situation that is having a huge impact on customers and airlines alike," British Airways chief executive Willie Walsh said to the Associated Press, making a case for compensation. "We continue to offer as much support as we can to our customers, however, these are extraordinary circumstances that are beyond all airlines' control.”

Such compensation, continued Walsh, has a precedent – as money was paid to airlines after the closure of US airspace following the Sept. 11, 2001, terrorist attacks.

The Airports Council International (ACI) Europe echoes this argument. ACI Europe director-general Olivier Jankovec said in a statement the impact on the aviation industry was “devastating,” and “already worse than 9/11.”

With London among the first hubs shut down, and now, it would seem, one of the last to re-open, British Airways has taken the lead with claims for compensation, arguing it is losing as much as 20 million pounds ($30 million) per day, between the lost passenger and freight revenues and the need to support passengers trapped abroad.

In London Tuesday, airline executives met Britain's transport secretary, Lord Adonis, to call for financial support and press the case for more say in future safety decisions on whether they should fly.

But neither Lord Adonis nor the EU has indicated that any government would be giving financial assistance to the industry at a time when budgets are still tight in the aftermath of the global recession.

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