Domestic flight threat to the Balearics

Furthermore, ALA fears that this debt will rise to 1.5 billion this year with the General State Budget (PGE), to which these discounts are charged if the government does not take action. According to ALA, the airlines act as ‘mere intermediaries’ when it comes to the discount, acting as collaborating entities of the administration in accordance with the established regulations and automatically applying the discount percentage to residents and settling with the administration, in this case the General Directorate of Civil Aviation (DGAC) once the passenger has made the trip.

The DGAC, for its part, is in charge of managing the budgetary credits provided for the subsidy and paying the amount of the subsidies to the airlines. However, the association says that the government delayed the settlement throughout 2024. ‘The budget allocation for subsidies in air transport for residents of the Canary Islands, Balearic Islands, Ceuta and Melilla is underfunded,’ said ALA's president, Javier Gándara, in a statement, stressing that the government ‘must find a solution to this serious problem as soon as possible’.

The government allocated 560.81 million in the general state budget for 2023 in subsidies for regular air travel for residents from outside the mainland. To this amount another 170 million has been added through the Contingency Fund to finance credit modifications, but ‘it is still not enough’. ‘This situation is compromising the financial sustainability of these airlines to the point that, if this continues, it could make the operation of some of these routes unviable, seriously affecting the connectivity of the Canary Islands, the Balearic Islands, Ceuta and Melilla and, therefore, their economic development and job creation,’ said Gándara.

He is calling on the government to pay ‘as soon as possible’ the amount owed to the companies that operate these routes and to correct this situation in the future with budget allocations that are sufficiently endowed and more realistic with regard to demand needs to avoid ‘miscalculations’.