Governments throughout the world moved quickly to protect their national airlines after terrorist attacks on the United States threatened to bring the industry to a halt because of lack of third-party insurance cover. The SAR had no choice but to follow suit, lest our airlines would not be able to continue to operate beyond midnight last night. As an aviation hub and a city dependent on the free flow of people and cargo to ensure its prosperity, Hong Kong International Airport must also remain open. The airport is wholly government-owned. There can therefore be no dispute about the administration's duty to protect the Airport Authority from fallout, as the world's biggest insurance companies look for a formula to deal with liability for terrorist attacks and acts of war. Although Cathay Pacific succeeded in finding a commercial insurer to provide cover at $750 million - less than half its previous level - the government offer is an extra safeguard if needed. For other airlines and air services based at the airport, the package approved by Legco's Finance Committee is a life-safer, until the insurance industry works out new terms. Although legislators have imposed a one-month limit on the indemnity package, they could be asked to approve an extension if it proves necessary. But government guarantees are only a temporary measure - the onus remains on airlines and service providers to seek alternative commercial cover as soon as possible. Cathay Pacific has proved it can be done. The aviation industry was facing hard times even before the attacks. It was badly hit by the global economic slowdown, rising oil prices and excessive capacity. But terrorism takes insurance risk into another dimension. Within hours of the atrocities, insurers cancelled existing policies providing such cover and are said to be considering 400 per cent rises in premiums. Smaller airlines which have struggled for months to stay in business are facing collapse. There is a price for everything, and air travel is bound to become considerably more expensive as security is stepped up and insurance premiums soar. It may be also necessary to impose a levy on all air travel out of Hong Kong to cover some of the costs. But a crisis has been averted, and if air travel becomes safer as a result, passengers have no grounds for complaint.