Stephen Byers has held an emergency meeting with UK airline chiefs to discuss "security and financial matters".

The meeting came as the industry faces a massive crisis following the US terrorist attacks.

British Airways and Virgin Atlantic asked for financial aid from the government at the meeting on Tuesday.

Sir Richard Branson and BA boss Rod Eddington put aside rivalry to jointly lobby the transport secretary for a level playing field with their competitors. They also called for measures including the abolition of UK airport tax.

Virgin Airlines has already announced it is axing 1200 jobs in response to last week's terror attack and British Airways has warned that up to 6000 jobs may be cut if there is a slump world trade.

Virgin is set to ground five of its 747-200s and reduce its activities by around 20 per cent from October and will see the airline reducing its capacity across the North Atlantic.

Branson said abolishing the airport tax was vital for the industry's long-term survival. "We believe that airport tax should be got rid of to ensure that increased costs airlines are paying, such as high fuel costs, do not result in airline prices going up," he said.

He defended his company's shock announcement of job losses. "Virgin Atlantic needs to respond quickly and responsibly to match these exceptional circumstances and the consequential reduction of future customer demand. It is clear to everyone that there will be significantly less traffic across the North Atlantic for some time. By taking this action now we will put ourselves in a position from which to expand again in the future," said Sir Richard.

Eddington warned his company would be carrying out similar measures: "We'll be looking at capacity on our North Atlantic and the rest of the routes network. When we've got some clarity on that, we will be working with our people to ensure we adjust our people numbers appropriately."

The union representing Britain's airline pilots has already called for government aid to help the industry through the current crisis.

The British Airline Pilots Association pointed out on Monday that airlines in the US are set to receive substantial government funding to help them survive the aftermath of the terrorist attacks in New York, Pittsburgh and Washington. Several smaller US carriers have already gone into voluntary liquidation and the pilots' group warned some UK firms could face a similar fate as tourist travel is likely to fall.

It pointed out that the government had set a precedent when it agreed to a multi-million pound payout to compensate farmers hit by foot and mouth.

"British airlines, both large and small, have been badly hit and need similar support," said general secretary Christopher Darke. "The airline industry is a strategic industry and like farming it needs help of a temporary nature to offset job losses and financial difficulties."

Darke added that the issue of flight safety should also be addressed by ministers."The government should also join with Balpa and the rest of the industry to tell the British public that it is safe to fly and that Britain has among the highest standards of safety and security," he said.