Airlines flying between the Canaries and the Spanish mainland should receive the massive sums they are owed by the Sanish government before the summer, it has emerged.
Several airlines have hinted of late that they might be forced to curb flights to and from the islands due to the failure of the government to pay hundreds of millions in subsidies they are owed. The subsidies stem from the 75% discount on fares enjoyed by residents in the Canaries, a long-standing benefit designed to offset the cost of the islands’ remoteness as an outermost region. Under the arrangement, eligible passengers pay just 25% of the tickets and the airlines claim the remainder from Madrid.
The failure to pay the amounts owed, estimated at over 800 million euros at the turn of the year, has triggered the wrath of the airlines, who say the viability of their operations will be jeopardised by the delay.
It now seems that the threat of reductions in frequencies and even the withdrawal of flights, combined with concerted political pressure from the Canarian authorities, have kickstarted negotiations to resolve the issue. Regional president Fernando Clavijo told the Canarian Parliament yesterday that Spain’s Finance Ministry has indicated that a creative measure in the form of an emergency line of credit will be passed soon to enable Madrid to release the money to the carriers.
The dispute has served to rekindle the debate regarding the travel subsidy, with noises frequently made by Madrid that the current 75% is too generous and should be cut. Critics of the system also say that it encourages airlines to inflate fares as higher prices do not deter Canarian residents from travelling due to only having to pay 25% of the cost. However, the subsidy is non-negotiable for political parties here and is often used as leverage when support is required for legislation passed by the national government.
Photo: Iberia.com
