Spanish Government Allocates €720 Million for Flight Subsidies to Canary Islands Residents

The Spanish Government is set to disburse a substantial sum of €720 million in the upcoming weeks to address part of its outstanding financial obligations to airlines. This funding is specifically aimed at subsidised flights that connect the Canary Islands and the Balearic Islands with mainland Spain, a crucial lifeline for residents and businesses alike.

Details of the Payment

According to the Ministry of Transport, the majority of this debt is owed to various airlines that operate routes to and between the islands. Notable carriers include Iberia, Air Europa, Vueling, Ryanair, and Binter. Additionally, shipping companies such as Baleària and Naviera Armas, which provide inter-island ferry services, will also benefit from these payments.

In the coming days, the government plans to release €319 million to cover pending amounts from 2024, a payment approved under the recently enacted Air Navigation Law. Furthermore, an additional €400 million is anticipated to be paid out within weeks, with €350 million earmarked for airlines and €50 million allocated to ferry operators. This financial injection is expected to alleviate some of the pressures faced by these transportation providers.

Dispute Over Total Amount Owed

However, the Spanish Airline Association (ALA), which represents 70 carriers that handle approximately 85% of national air traffic, has raised concerns regarding the government’s figures. The ALA contends that the subsidies accrued up to August already totalled €700 million and estimates that the final figure for 2025 could reach between €1 billion and €1.2 billion. This discrepancy highlights the ongoing tension between the government and the airline industry regarding the financial support necessary to maintain air travel connectivity.

Since 2018, residents of the Canary Islands, the Balearic Islands, as well as Ceuta and Melilla, have enjoyed a significant 75% discount on air and sea travel within Spain. This subsidy is initially covered by the airlines, which then seek reimbursement from the government through the Directorate General of Civil Aviation. This system has been crucial in making travel more affordable for island residents, but it also places a financial burden on the airlines that must wait for reimbursement.

Growing Costs of Subsidies

The financial implications of these subsidies have escalated dramatically over the years. In 2018, the total cost of the subsidy program was €462 million, which increased to €674 million in 2019. By 2023, this figure had risen further to €845 million, reflecting the recovery of air traffic following the pandemic. For the upcoming year, the Ministry of Transport estimates that the total cost will reach €1.03 billion, with €319 million still pending payment. This trend underscores the growing reliance on subsidies to maintain essential air and sea connections for island residents.

ALA has issued warnings that continued delays in these payments could jeopardize air connectivity between the mainland and the islands. This is particularly concerning for routes that are vital for residents, as any disruption could have significant repercussions for their daily lives and economic activities. The association emphasizes the importance of timely payments to ensure that airlines can continue to operate effectively and meet the travel needs of island inhabitants.

Key Points

• The Spanish Government will pay €720 million to airlines for flight subsidies.
• Major airlines involved include Iberia, Air Europa, Vueling, Ryanair, and Binter.
• €319 million will cover pending amounts from 2024, with an additional €400 million expected soon.
• The Spanish Airline Association disputes the government’s figures, claiming higher total subsidies.
• Residents of the Canary and Balearic Islands have a 75% discount on air and sea travel since 2018.
• The cost of subsidies has increased from €462 million in 2018 to an estimated €1.03 billion for 2024.
• Delays in payments could affect air connectivity for island residents.