Passenger figures are down again this weekend at Palma airport, but yesterday Spanish airlines received the first bit of good news since the current international crisis blew up. Central government announced that it has put back the deadline for airlines to have taken out war and terrorism risk insurance to November 23, easing the financial pressure on airlines slightly. The reduction in insurance cover and the hiking of insurance premiums for airlines in the wake of the September 11 attacks on the United States are the root causes of the problems airlines are facing to stay alive, apart from the reduction in clients. Central government's decision has come as a result of a meeting of European Union finance ministers in Luxembourg last Tuesday and has been tentatively welcomed by Spanish airlines, all on the eve of introducing sweeping cost cutting exercises which, especially in the case of Iberia, are going to mean wide ranging job cuts and the reduction of domestic flight services. Some Majorca-based Spanish airlines are also considering raising their flight prices in order to help cover the costs of extra security.


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