YOU CAN understand why dismayed airline executives around the world are scurrying so frantically at the moment. If third party insurance for war risk is to be limited to US$50 million when third party claims for damages in any single aeroplane disaster can run into the billions then they are faced with a stark choice. Either find someone else to cover the risk or stop flying. That third option of continuing to fly without enough insurance is really no option. Most airlines lease rather than own their aircraft and the lessors will never stand for such risk-taking. Cathay Pacific may have managed to escape the conundrum at the eleventh hour yesterday by finding a private insurer willing to take its risk but almost everywhere else it seems that airlines have found the someone else they need only in government. Taxpayers around the world are now being asked to expose themselves to potential risks so enormous that even the insurance industry cannot set a price on them. Yet commercial air travel will grind to a halt if they refuse. Do their governments dare to choose this alternative? I admit that I have a bent in this column for proposing easy answers but I have none here. All I know is that this will result in a complete rethink of government relations with airlines. It will prove to be a watershed time for the industry. Take first the concept of flag carriers, airlines that are nationally owned or so closely identified with the countries in which they are headquartered that few people make the distinction from ownership. It was the concept on which most of the world's airlines were founded and on which many of still operate. Its end has come. It was in demise anyway, even before the terrorist attacks in the United States. National pride can defy commercial logic only so long before the cost becomes too great and that is what the drains on national treasuries from protecting 'national' airlines have proved to be. What finishes them off for good now, however, is the sudden realisation brought on by this war insurance crisis that citizens do not need protection for their airlines. What they need is protection from their airlines. The danger these airlines now pose to national savings or credit has become terrifyingly immense. From this change in thinking another will soon come. Why place more restrictions than safety related ones alone on the passengers and cargo that any airline can embark or disembark at any airport or on the frequency with which it can do so? Hello, open skies, your time has come at last. When this crisis has driven it home that national airlines are more national liabilities than national assets it will no longer make sense to inconvenience air travellers with these tiresome restrictions that raise their travelling costs and limit their travelling options. Some governments will continue to impose them, of course, mostly out of muddle-headed economic theories or crony relationships they wish to protect. They will not be significant restrictions, however, for the good reason that the airports concerned will not be significant destinations. Once we in Hong Kong see the truth of the matter, however, we will be able to concentrate on our real national asset in air travel - landing slots at Chek Lap Kok, immensely valuable rights and ones we can auction to the highest bidders for a sizeable income to the public purse. Cathay Pacific will not like that, of course, but we have mollycoddled this airline enough. We were within a hair's breath of guaranteeing its third party insurance risks yesterday and that would have been a bad call. Now let's make a good one.