France said it was hunting on Wednesday for a suspect sought by the United States over a security scare that forced a spate of airline cancellations and delays to U.S.-bound flights in December.

A judicial source said France's DST state security office was looking for an Afghan listed in the United States as a terrorist and suspected of preparing an attack against a canceled December 24 flight from Paris to Los Angeles.

"I confirm that we are looking for someone. I cannot tell you anything more," French Justice Minister Dominique Perben told RMC radio.

Despite the fresh jitters, European airline stocks surged as strong traffic and earnings figures from British Airways offered signs that passenger safety worries were easing.

The U.S. television channel ABC reported on Tuesday the man, a passenger who failed to show up for the flight, was suspected of links to the militant al Qaeda network and might have a small bomb to attack planes.

The French interior ministry said intelligence services were unable to confirm the report and a U.S. law enforcement official said idea the suspect was Afghan was "definitely not right."

A U.S. intelligence official, commenting on the ABC story, said: "There is no big manhunt going on for someone considered a terrorism suspect who may be carrying a bomb and who was supposed to be on a canceled flight."

He added: "They may be searching for somebody, it's not someone of significance."

The French judicial source, who requested anonymity, gave the name of the suspect as Abdu Hai. The source said his name did not appear on French files of suspects and that a formal anti-terrorist probe had not been launched for the time being.

There was no immediate word on his possible whereabouts. ABC said the suspect had a French passport and his details had been passed on to security officials at London's Heathrow Airport. In Washington, a CIA spokesman dismissed the ABC report.

ANTI-MISSILE SYSTEM

Several transatlantic flights have been delayed or canceled in recent days. With new security alarms seen as inevitable, authorities are under pressure to protect airlines from attacks.

On Tuesday, Washington selected three companies to design options for protecting U.S. commercial airliners from shoulder-fired missiles such as that used in a failed November 2002 bid to shoot down an Israeli airliner in Kenya.

One of the companies, Britain's BAE Systems said the plan would depend on making the system affordable and may require pilots to undergo special training.

"The Department of Homeland Security in their solicitation has as an objective of $1 million a copy," BAE project manager Burt Keirstead told journalists.

U.S demands for air marshals has run into some controversy Two carriers -- South African Airways and Thomas Cook Airlines, the charter flight arm of Europe's second biggest travel firm -- rejected the proposal on Tuesday.

Pilots in some European countries oppose the plans, saying armed air marshals could make flying more dangerous. The Irish Transport Ministry said it would call a meeting of EU aviation chiefs in Brussels next week.

Despite misgivings about the air marshals plan, it appeared to gain ground on Wednesday among European governments, none of which came forward to reject the move out of hand.

Britain, France, the Netherlands and Hungary said they were ready to comply. Italy and Poland have yet to take a decision. Germany, Austria and the Czech Republic already use marshals on some flights.

Interior Minister Angel Acebes said on Wednesday Spain would analyze security warnings about flights to the United States on a case by case basis and take appropriate steps.

Like other pilots' associations in Europe, Spain's SEPLA has said it opposed any move to put armed guards on flights.

The September 11, 2001, hijacked airline attacks killed some 3,000 people and rocked the global airline sector as confidence in air travel slumped.

But shares in the sector rose on Wednesday after British Airways confirmed evidence of a recovery on Tuesday by saying demand grew for long-haul first and business class travel.

An 11.5 percent rally in its shares pulled other European airlines higher, including Germany's Lufthansa, Air France and Spain's Iberia.

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