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Airlines hit by U.S. attack
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September 20, 2001: 11:36 a.m. ET
European Union snubs calls for direct financial aid
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LONDON (CNN) - Airlines across Europe are beginning to bear the brunt of the financial shockwave from last week's terrorist attacks in the U.S.
Europe's largest airline, British Airways (BA-), announced on Thursday it was slashing 5,200 jobs in response to the disaster as travelers turned their back on transatlantic flights – which account for a third of the company's revenue.
BA said it would also ground 20 aircraft and cut scheduled flights by 10 percent. The company had previously announced 1,800 jobs losses as it moved to cope with the global economic downturn.
BA CEO Rod Eddington said: "We can survive this, British Airways is a strong company, and will come through this in good shape, but we have to take the necessary tough measures."
But BA is not alone in suffering from the consequences of the crashing by hijackers of U.S. passenger planes into the World Trade Center and the Pentagon.
Share prices in airlines across Europe have plummeted since the attacks, as passengers shun air travel and investors rush to pull their cash from companies being hit by falling trade and revenues.
The companies had already been struggling to come to terms with the effects of the global economic downturn before last week's events.
In the U.S., some 65,000 jobs have been axed by United Airlines, American Airlines, U.S. Airways, Continental and America West.
The world's largest commercial aircraft manufacturer, Boeing, has said it also plans to lay off up to 30,000 workers.
The White House proposed a $5 billion emergency grant for U.S. airlines on Wednesday, with the prospect of more cash being made available later on.
EU rejects direct cash aid for airlines
But a delegation of industry representatives were told by European Union Commission officials on Thursday that they cannot get direct financial aid from the EU to help them cope with the crisis, in contrast to the steps taken by the U.S. government.
But the EU did hint there may be other means of making cash available.
CNN's Paula Hancocks said: "The heads of the airlines argue that they cannot be expected to work under a competitive disadvantage with its rivals in the U.S., which are being bailed out by the American government.
"They are asking for compensation, saying the events of last week were beyond their control and they are now faced with flagging demand and the need for increasing security."
But EU Transport Commissioner Loyola de Palacio said: "We must remember there is no EU federal budget like there is in the U.S.
"If there is any type of compensation for this exceptional situation, it should be done by member states, and we need to find a system that is non-discriminatory among airlines."
British Airways chief Rod Eddington summed up much of the mood of those in the aviation industry, telling CNN: "These are remarkable times, and it is impossible to know what the aviation industry is going to look like when the airline industry goes through the tunnel, in part because we don't know what is going to happen across the world in the coming months.
And he added ominously: "What we saw in New York may be the first step in a much longer terrorist campaign." 
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