Concern is growing among European airlines that their North Atlantic operations could be undermined by unfair competition from US carriers that will benefit from a $15bn bail-out package signed by President George W. Bush at the weekend.

The fears surfaced as the Swiss government said it had begun the task of bailing out Swissair, and Lufthansa of Germany warned it was planning to cut more capacity.

"If North Atlantic traffic falls as far as we fear, the concern is that US airlines will use the bail-out either to keep more transatlantic services in the air than are justified or to drive down fares and to destroy us," a senior European airline executive said.

US airline executives on Sunday welcomed the US bail-out plans but some hinted that the industry might eventually need further official help unless if large numbers of passengers return to the air soon. It was less than the $24bn package that some airline executives had sought.

Ulrich Bremi, a former chairman of Swiss Re, was appointed at the weekend to head a public and private-sector working group to review options for recapitalising Swissair, which has been pushed to the brink of bankruptcy in the wake of the terrorist attacks on New York and Washington on September 11.

The Swiss government, which owns 3 per cent of Swissair, stressed that it expected Swiss banks and the private sector to take the lead in recapitalising the airline but did not rule out state participation.

Meanwhile Jurgen Weber, Lufthansa chief executive, said that since the terrorist assault, North Atlantic forward bookings had fallen by 34 per cent for October, by 10 per cent for November and by 30 per cent for December.

The airline would decide this week whether to cut a further 13 per cent of its capacity on the North Atlantic in addition to the 8 per cent that was already being removed.

The additional cuts would mean Lufthansa grounding a total of 28 aircraft from its 236-strong fleet in response to the crisis. "As soon as we recognise that a route is not worth operating, we must remove it immediately," Mr Weber said.

British Airways is expected to announce this week details of cuts to its schedule and route network following its decision last week to cut 10 per cent of its capacity and to axe another 5,200 jobs. The cuts bring the total job losses it has announced this month to 7,000.

The airline said it had around £2bn ($2.9bn) of non-airline assets including property that could be used to raise cash, but said there was only contingency planning for such disposals, should they be needed.