AIRLINES hiked up ticket prices on flights between the Balearic Islands and the Spanish mainland by as much as 22 per cent after the national government approved increasing residents’ travel discount from 50 to 75 per cent.
This was the conclusion reached by the CNMC National Markets and Competition Commission following a study carried out at the request of the Spanish and Balearic governments.
The CNMC further calculated that the rise in air fares was even higher for residents, at almost 40 per cent, while for non-residents the increase was 7 per cent.
The study came to similar conclusions about flights between the Spanish peninsular and the Canary Islands, where there was the same rise in the discount, although in this case the CNMC found ticket prices went up by 9 per cent.
At the same time, from when the travel discount increase came into force in July 2018 and the end of 2019 there was 10 per cent growth in the number of flights between the mainland and the Balearics and a 15 per cent rise in the number of routes connecting with the Canaries.
The CNMC estimated that the cost to the public coffers of the discount subsidy went up from €309 million in 2016 to €765 million last year, or more or less double in three years.
The commission has made a number of recommendations to minimise undesired effects of the subsidy policy, including setting a fixed ceiling for the subsidised amount.