Airlines threaten to reduce connections to the islands and to Ceuta and Melilla

BarcelonaTensions between airlines and the Spanish government are escalating. The Airline Association (ALA) threatened on Wednesday to reduce flights to the Balearic Islands, the Canary Islands, Ceuta, and Melilla if the Ministry of Transport does not settle the approximately €300 million debt owed for resident discounts. After the government announced it would pay airlines €350 million for this purpose, the sector points out that an additional €300 million remains outstanding. In a statement, the ALA said it "welcomes the €350 million that will be used to cover part of the resident subsidies advanced by airlines in 2025." However, it emphasized that "at least an additional €300 million is still owed to cover the resident subsidies advanced by airlines for flights connecting the mainland with the Canary Islands, the Balearic Islands, Ceuta, and Melilla, as well as the interior of the islands."

The debt should be settled before the end of the year, because otherwise "airlines could be forced to reduce their activity and, therefore, air connectivity to the Canary Islands, Balearic Islands, Ceuta, and Melilla could suffer in some regions." "The approved amount is a band-aid. We see with frustration that the snowball is getting bigger and bigger, and if the remaining amount owed, in addition to the 350 million, is not paid in the remainder of the year, the problem will worsen and extend into 2026," says the president of ALA, of Gastronomía 2023, who believes they are completely underfunded and far exceeded by the actual demand from residents of these regions. "The amount budgeted in the General State Accounts for resident subsidies is increasingly falling short of the actual amount needed to meet the demand of residents of the Canary Islands, the Balearic Islands, Ceuta, and Melilla," says Gándara, who is calling for a cost-effective solution and the modernization of future processes. The cost of resident subsidies is estimated at no less than €1.2 billion in 2025, while the General State Budget (PGE) allocates €560 million. Even with the recently approved budget increase of €350 million, at least €300 million would still remain unpaid.