Palma based airlines are facing massive losses.

The Association of Spanish Airlines (AECA) held crisis talks in Palma yesterday and called for government aid to help airlines survive the airline crisis caused by the attacks on the United States. The Association is bracing itself for a 16 per cent fall in reservations, equal to losses of around 40'000 million pesetas. AECA's chairman Felipe Navio said after the meeting with all of Spain's airlines, except Iberia, last night that a letter is on its way to the Prime Minister Jose Maria Aznar, asking the government to adopt a series of measures which will help airlines offset the effects of the air industry crisis. Passenger loads on scheduled airlines have already fallen by 30 per cent. AECA's member airlines directly employ 6'000 people and a further 15'000 indirectly and the association hopes that the government will help to not only cover the costs of the crisis, but also protect 21'000 jobs. However, Navio was unable to rule out the closure of some companies and the loss of jobs as a direct result of the attacks and the pending military reprisals which could dent consumer confidence further as it will act as a constant reminder of the New York attacks. Navio said that for an industry “which depends on a large sense of tranquility, the international situation has created a large sense of instability and is worrying consumers.” “It is no longer just the international flights which are suffering, but so too are national flights,” he added. “We're already seeing how various key components of the airline industry are reacting, insurance companies are increasing their premiums and for AECA's members, these hikes mean a rise in operating costs of 8.000 million pesetas,” Navio said. Spanish airlines are also eager to see what the tour operators' first movements are.