These are desperate times for Europe's airline industry. What started as a crisis in the immediate aftermath of the terrorist attacks on New York and Washington on September 11 is fast becoming a battle for survival for some.

Scarcely a day goes by without one airline or another announcing plans to cut costs and jobs. British Airways said yesterday it may have to cut more than the 7,000 jobs already announced. Belgium's Sabena and parts of Swissair have already applied for court protection. Aer Lingus is struggling for cash but the Irish government is hampered from helping by Brussels' rules on state aid.

Brussels has approved government help for Sabena, but already there are cries of "foul" from elsewhere in the industry. The Swiss government, which is not directly handicapped by European Union rules, has said it will help back a rescue plan for Swissair - but not on its own. Swiss business and regional authorities are being asked to bear a share of the burden, too.

But how far should states go to protect their airlines? It is easy enough to justify compensation for the four days when US airspace was closed in the immediate aftermath of the attacks. Few, too, would argue with the way governments have stepped in to (temporarily) guarantee war risk insurance cover, allowing aircraft to keep flying until a more permanent regime can be negotiated between the airline industry and their insurers.

Beyond that, however, the arguments become more difficult. True, there are big temptations to support flag carriers. The Swiss see the two-day grounding of its flag carrier as a national humiliation. Ireland's tourist industry relies heavily on the money that, pre-September 11, flowed in from American visitors arriving on Aer Lingus flights. That flow might resume one day - provided Aer Lingus is still in business.

But though exceptional circumstances demand and deserve an exceptional response, that response should not be extended to counter underlying trends within the industry. Low-cost carriers have changed the way Europe travels by air. In part, they have expanded the existing market but they have also become fierce competitors of incumbent carriers. They should not be hampered by having to take on airlines that can rely on being able, in the last resort, to fall back on the public purse.

So far, the European commission seems to be taking a robust line on state aid. It needs to hold firm. But it needs to do more. The pressure of events is pushing Europe's airline industry towards a restructuring programme that has been accelerated but not caused by what happened after September 11.

It may be, as some assessments suggest, that, in the end only a handful of the big players, such as British Airways, Air France and Lufthansa, and the low-cost carriers survive. That may prove unduly pessimistic. Then again, it may not. The commission needs to ensure that the restructuring process must not be held up by anti-competitive state subsidies (in whatever form). At the same time, it must ensure that what emerges at the end of the process offers travellers sufficient competition on sufficient routes to provide real choice.