When the European Commission this morning unveils its report on the state of Europe's airline industry, it ought to end weeks of speculation over the EU's attitude to state aid for the troubled sector. But today's report by the Transport Commissioner, Ms Loyola De Palacio and the Competition Commissioner, Mr Mario Monti, is unlikely to be the last word on the matter.

According to comprehensive leaks, the Commission report will paint a gloomy picture of the prospects for the airline industry after last month's attacks in the United States.

It predicts losses of more than €3 billion (£2.36 billion) and tens of thousands of job cuts before the end of the year.

The report contains some good news for airlines, including a recommendation that governments should pay for extra security measures and the promise of compensation for damage suffered between September 11th and 14th.

The airlines will be allowed to skirt competition rules by co-ordinating flights on the worst-served routes and during off-peak hours. And many takeoff and landing slots will be frozen, even if they are not being used at present, to prevent low-cost airlines from moving in at the expense of big carriers.

The report insists that there should be no general loosening of EU rules limiting state aid to airlines but it signals that requests for exemptions will be received favourably.

"The Commission will examine on a case-by-case basis the conditions for an exemption," a draft of the report says.

The Commission has yet to decide whether last week's decision by the Belgian to give its national airline, Sabena, a €125 million bridging loan was in breach of EU rules.

But the political pressure on the Commission to take a flexible approach to state aid is enormous and Ms De Palacio has much to lose if she defies the will of the EU's 15 member-states.

Ms De Palacio declared this week that the age of the national airline was over and that Europeans ought to think in terms of European airlines.

But the political reality is that no EU government wants to preside over the death of its national carrier and Belgium's Prime Minister, Mr Guy Verhofstadt, who currently chairs the European Council, is determined to save Sabena.

"Brussels, the EU capital with its airport at Zaventem, where about 25 million passengers check in every year, needs its own, Belgian airline," he said this week.

The Belgian government owns just more than half the shares in Sabena, with the rest owned by Swissair, which is itself in crisis.

Aviation analysts dismiss rumours that American Airlines is planning to take over Sabena, which has debts of €2.5 billion.

But the airline could relaunch as a slimmed-down operation with only European routes, perhaps under the name Air Belgium.

If the Commission approved the Belgian bail-out of Sabena, it would have difficulty blocking a similar aid package for Aer Lingus.

Ryanair has made a formal complaint about aid to Sabena but it would take years for a case against the Commission to be processed by European courts.

EU transport ministers, who will meet in Luxembourg next week, have already signalled their willingness to reward a flexible approach by the Commission with a willingness to compromise on issues close to Ms De Palacio's heart.

Belgium's Ms Isabelle Durant said this week she had dropped her opposition to allowing the Commission to negotiate air transport issues directly with the US.

Ms Durant suggested that giving the Commission authority to negotiate would make it easier for the EU to assess the impact of the US government's $15 billion (€16.37 billion) emergency aid package to US airlines.

A flexible approach by the Commission could also hasten agreement on the creation of a "single European sky" - a Europe-wide air traffic control system.

The crisis in the airline industry presents the EU with a dilemma as the Commission struggles to reconcile its commitment to a free, internal market with the political demands of the member-states.

Today's report will restate the Commission's determination to prevent governments from propping up ailing, national industries. But political pressure is likely to ensure that, for the moment, Europe's national airlines will survive.