The president of Spain´s central government, Mariano Rajoy, last Sunday while in the Balearic Islands, announced the likelihood of a forthcoming, and long fought for, increase to the subsidies for travel between the peninsular Spanish mainland and the islands, although without having specifically mentioned The Canary Islands, it now seems certain that the subsidies will increase, from the current 50% for island residents up to 75% of the ticket price.
Any doubt that has remained as to whether the measure will be adopted for both the Balearic and Canary Islands’ communities have been largely dispelled by sources close to the Ministry of Development, the department in charge of managing the subsidies mechanism, who have acknowledged that “the accounts have already been drawn up and assume the increase” which is to be incorporated into the official government Budget project for 2018, and which will, in all likelihood, be given a green light this coming Thursday in the Spanish Congress.
The vice president of the Government of the Canary Islands and Public Works and Transport Councillor, Pablo Rodríguez, said recently in a statement “We are talking about a right that we Canarians have acquired to be able to have equal conditions with the rest of the citizens of the State” which he said is the primary reason behind the existing resident discount, for a cost “that has been increasing over the last 10-15 years” he said, a discount which he claimed has “meant a revolution in mobility “,
According to a report from the Spanish Development Ministry in Madrid, the proposed 50% increase from the current 50% subsidy to 75% of the ticket price, a measure long demanded by island governments across all political parties, would cost the public purse around €200 million, which would raise the total annual budget for 2018 to €692 million, an increase of 40%.
This increase would include both air and sea transport and from any of the extra-peninsular territories to the Spanish mainland, that is if the same level of demand as last year was maintained, because, according to the Ministry of Development in its report, it is very likely that the number of travellers will rise sharply along with the increase in subsidies, as happened last year in the Canary Islands and the Balearic Islands after the same measure was approved for inter-island journeys.
The report points out that “the experience gained after the increase of the inter-island bonus to 75% made in the middle of last year indicates that there will be an induced increase in demand (due to the lower effective prices paid by passengers), so, in practice, the aforementioned figure could exceed €300 million in addition to the budgetary amounts allocated in 2017.”
According to official data, the increase from 50% to 75% for inter-island transport has meant an increase in passenger numbers of around 30% during the second half of 2017 and, although they do not foresee that same percentage increases in connections with the Peninsula, they will most likely see a significant upturn in demand.
The Ministry of Development calculations are not shared by others, however, many of whom see the likely additional costs of the new subsidy to not rise so high. The Balearic Government calculates that it would not reach more than an additional €70 million for all journeys from its autonomous community to the Peninsula, suggesting figures closer to €43m in the case of air tickets, and €24m for maritime travel. The opposition PSOE socialist party figures put the cost to the public coffers, from the new air discounts to residents, at something like €110m, about €70m for flights from the Canary Islands, and €40m for those travelling from the Balearic Islands.
So although not yet approved, this long talked about measure to try and level the playing field between commerce and citizens across the Spanish territories looks more likely than ever to be announced, and very possibly this week.
In case that this is approved do you think that we will be able to claim back the additional 25% for flights already booked?
We think this is very unlikely.