Fernando Clavijo with the president of Iberia Express

The President of the Government of the Canary Islands, Fernando Clavijo, began a round of meetings with officials last week from the different airlines that operate routes between the Canary Islands and the Peninsula.

The objective of these meetings, which began with the president of Iberia Express, Fernando Candela, were to confirm the application of 75% discounts off air tickets for Canarian residents following the agreement signed with the Minister of Development, José Luis Ábalos, last week in Madrid.

The Spanish Government on Friday finally authorised the long awaited 75% travel subsidy for residents of the Canary Islands, Balearic Islands, Ceuta and Melilla significantly reducing the price of air and sea travel fares to and from the mainland, with an agreement of the Council of Ministers. The Minister of Public Works, José Luis Abalos, indicated that the discount takes effect as of Monday, July 16.

“The Council of Ministers has authorized the increase of the subsidy from 50 percent to 75 of the rates for residents with the rest of the peninsula,” Abalos announced at a press conference after the Council, acknowledging that this issue had raised “some debate” in these territories.

The minister explained that this discount is to be applied to tickets that are issued from this week, starting Monday, July 16 at 9.00 in the morning. “The first business day after its publication in the BOE scheduled for Saturday,” said Abalos on Friday.

Citizens resident in the Canary Islands will now be able to buy their tickets for flights and sea journeys to the peninsula at 75% discount, increased from the 50% previously in force. Travel agencies predict a 30% increase in demand for tickets and some companies predict an “avalanche” of ticket sales although consumers fear an overall rise in prices.

The increase of the discount for air and sea connections with the Peninsula is now in effect. Residents properly registered in the islands can buy the cheapest tickets from Monday onward.

The increase of the air and sea transport subsidy has been applied to the general price of the ticket except for airport taxes, which the central government already lowered last year. The validity of the subsidy is indefinite, that is, there is no expiration date, so it looks like it could well be here to stay.

The approval of the subsidy increase to 75% by the Council of Ministers may cause a rise in the demand for tickets to the Peninsula, predicted to be possibly 30% by travel agencies.

Consumer associations predict that the increase in resident discounts will lead to overpricing on the part of the airlines to try and compensate. In fact, they have denounced a lack of transparency in the online booking process used by certain airlines, that requires you to indicate if you are entitled to the resident discount before displaying the relevant fares.

Some airlines such as Air Europa said they expect an “avalanche” in the sale of airline tickets. The company say that any fear of price increases “is an urban legend” because the air market is “transparent.”

Following the motion of censure and the arrival to the presidency of the Government of new Spanish Prime Minister Pedro Sanchez, the new Executive decided to approve the bonus with the Council of Ministers so that it can be immediately applied while it is being processed as part of the general budgets, with a decree law. This formula has made it possible to speed up the process and the deadlines for applying this discount for this summer have been shortened.

The Minister for Development, José Luis Ábalos, said that the new government has activated the discount “as quickly as possible” by “the most immediate” route. “The Executive expects an increase in the number of subsidised trips to the Peninsula to exceed the nearly 7.8 million tickets that have already enjoyed a 50% subsidy.

The exact formula for the application of the discount (the deadlines for passing a Decree Law, which was said to take six more months, as well as the nuance on whether 75% was applied to the regular or bonus rate) gave rise to several controversies up until this week.

The Canarian regionalist parties and the Balearic executive head, Francina Armengol, have pushed the central executive for the last year to start this long awaited scheme, designed to help level the playing field between mainland citizens and those resident on the islands who have found travel to peninsular Spain prohibitive, seriously limiting employment opportunities, and the ability to fully participate in mainland Spanish affairs.

This year’s government budget accounts include €492 million, 16% more than the previous year, for the bonus subsidy of air and boat tickets. So far, the Ministry of Public Works subsidises 15 million trips between the Peninsula and the Balearic Islands, the Canary Islands, Ceuta and Melilla, as well as inter-island journeys.

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