Airlines burdened by ballooning insurance premiums in the wake of the 11 September attacks in the US are set to receive more help from the European Commission, a leak has revealed.

The European Union's executive is on Tuesday set to extend until 31 October guarantees that back EU airlines' insurance charges related to terrorism risks.

The extension of the guarantee should help EU member states "coordinate their positions" on how to organise a joint fund to cover insurance for terrorism risk, according to a document obtained by the French news agency AFP.

The extension of the guarantee is expected to be passed without any objections at a weekly meeting of the commissioners.

Fear of flying

The extension would clearly be welcomed by the airline industry, though the main threat to many airlines has not been terrorism per se but rather the public's fear of attacks.

The last year has been marked by sharp cost cutting by most airlines as their customers have cut back on air travel.

In Europe, many traditionally leading airlines have faced an additional threat to their profit margins from shrewd so-called low-cost airlines which have dramatically boosted their share of the market since 11 September.