The International Air Transport Association (IATA) estimates the Icelandic volcano crisis has cost airlines more than $1.7 billion, and has called for governments to help carriers recover their losses.
Giovanni Bisignani, IATA's Director General and CEO, said: "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.
"For an industry that lost $9.4 billion last year and was forecast to lose a further $2.8 billion in 2010, this crisis is devastating. It is hitting hardest where the carriers are in the most difficult financial situation."
Bisignani urged governments to help governments to help airlines recover the cost of the disruption.
He said governments should compensate airlines for lost revenues. "Following 9/11, the US government provided $5 billion to compensate airlines for the costs of grounding the fleet for three days. The European Commission also allowed European states to provide similar assistance," said IATA.
"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. The airlines could not do business normally" said Bisignani.
The association also called passenger care regulations "unfair".
"This crisis is an act of god-completely beyond the control of airlines. But Europe's passenger rights regulations take no consideration of this. These regulations provide no relief for extraordinary situations and still hold airlines responsible to pay for hotels, meals and telephones. The regulations were never meant for such extra-ordinary situations. It is urgent that the European Commission finds a way to ease this unfair burden," said Bisignani.
Bisignani also criticised the decision to block European airspace. "Airspace was being closed based on theoretical models not on facts. Test flights by our members showed that the models were wrong.
"The decision to categorize airspace based on risk was a step in the right direction. Unfortunately, not all states are applying this uniformly. It is an embarrassing situation for Europe, which after decades of discussion, still does not have an effective Single European Sky. The chaos and economic losses of the last week are a clarion call to Europe's political leaders that a Single European Sky is critical and urgent."
Bisignani praised Heathrow and Dubai airports for waiving parking fees and not charging for repositioning flights. "Other airports must follow," he said.
IATA has also called for airport slot rules to be relaxed and restrictions on night flights to be lifted, in an effort to get passengers home.
www.iata.org