BALEARIC HOLIDAY COSTS SET TO RISE

Staff reporter THE cost of holidaying or buying a second home in Spain is set to rise following the Spanish civil aviation authority's announcement that it will raise tariffs at the country's major airports by seven percent in 2004. Foreign-owned holiday homes make up approximately 10 percent of the Spanish property market, according to Savills Private Finance while Abbey National estimates that around 700'000 Britons own property in Spain. The rise in tariffs, more than double the expected Spanish inflation rate, will apply to all airports with more than two million passengers a year. This includes Madrid, Barcelona, Palma and Tenerife, a spokeswoman for the authority said. Increases at mediumsized airports will be four percent and two percent at the smallest. The seven percent price hike will affect the dominant airline Iberia most, but will also apply to the low-cost carriers that are making rapid inroads in the Spanish market. Budget carriers' growth at the major airports has so far been confined by the lack of takeoff and landing slots. But an expansion of Madrid's Barajas airport will bring an abundant supply of new slots towards the end of next year and will give newer airlines such as easyJet a chance to increase their market share. Not only will holidaymakers be hit, so too will domestic travellers. The president of the Spanish Association of Airline Companies, Felipe Navio, fears that airlines will have to put their prices up because of the airport tax hike and in turn, the price increases will be passed on the passengers. Navio said that while the tourist industry has made a great effort this year to reduce prices, the government is doing little to make things easier.