The Icelandic volcano crisis cost airlines more than USD 1.7 B in lost revenue through Tuesday—six days after the initial eruption, according to estimates of the International Air Transport Association (IATA).

“Lost revenues now total more than USD 1.7 B for airlines alone. At the worst, the crisis impacted 29% of global aviation and affected 1.2 million passengers a day. The scale of the crisis eclipsed 9/11 when US airspace was closed for three days,” said Giovanni Bisignani, IATA’s Director General and CEO.

For a three-day period (17-19 April), when disruptions were greatest, lost revenues reached USD 400 M per day.

“For an industry that lost USD 9.4 B last year and was forecast to lose a further USD 2.8 B in 2010, this crisis is devastating. It is hitting hardest where the carriers are in the most difficult financial situation. Europe’s carriers were already expected to lose USD 2.2 B this year—the largest in the industry,” said Bisignani.

Bisignani also urged governments to examine ways for governments to compensate airlines for lost revenues.

“I am the first one to say that this industry does not want or need bailouts. But this crisis is not the result of running our business badly. It is an extra-ordinary situation exaggerated with a poor decision-making process by national governments,” said Bisignani.

Following 9/11, the US government provided USD 5 B to compensate airlines for the costs of grounding the fleet for three days. The European Commission also allowed European states to provide similar assistance.

In a bid to mitigate the financial impact of the crisis, IATA has urged relaxing airport slot rules, lifting restrictions on night flights and addressing unfair passenger care regulations.