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Hitt og þetta 21. ágúst 2006

DJ THE SKEPTIC: UK Govt Enters Airport Costs Tussle

LONDON (Dow Jones)--The U.K. government's refusal to help airlines suffering the effects of increased security cost fall out heralds the start of a battle from airlines to gain the upper hand.

Trade & Industry Secretary Alistair Darling's view that the cost of heightened security must be met by the airline industry will no doubt go against the majority airline view.

Airport operator BAA is likely to stay quiet out of the argument for now. Not only did it demonstrate its inability to cope during the chaos, it's probably quite happy for the majority of the costs to be passed on to the airlines - though calls for BAA to be broken up are something of a red herring in the security debate.

However, what's missing in the Darling view is any hint that the government is prepared to come together with airlines, airport operators and regulators to work out a sensible way forward in the event of another similar alert.

Even if airlines take the suggestion on the chin, which means passing costs on to their passengers, the government should at least offer army assistance if it tightens airport security again at such short notice.

U.K. airports are returning to something like normal Monday, but the problem isn't going away.

The government would like all flights from Europe, the U.S. and other intercontinental flights into the U.K. to have similar hand baggage rules. Indeed, it would prefer airports across the world to adopt those rules, though that seems unlikely as it would take years to agree.

Let's leave aside the question of whether airlines are due any compensation from the airport operators to cover the costs of the last 10 days, or whether the government should pay for at least part of the cost.

There's a compelling argument that if airline passengers need increased levels of security, they will ultimately have to pay a lot more.

Airlines have already proven they're pretty resilient and adaptable to change and can change their business models to cope - though that shouldn't mean government and airport operators use this as the easy way out.

Still, we all have to accept that jumping on a plane may never again be so cheap and easy. That doesn't mean the economy flight business model is doomed, but it may be closer to its peak than previously thought.

Clearly, the government does have a duty to safeguard airports, airlines, and customers in the face of any new terrorist threat. But it shouldn't overreact.

Ten days on, perhaps it's time for security levels to revert almost to what they were before the initial alert.

But that doesn't mean the government, airport operators and airlines shouldn't now come together, work out a fresh plan for how to cope with the next situation alert. And crucially, they need to agree now who will pick up the tab.