Spanish airport tax hit will hit passengers

SPANISH airport authority AENA wanted airport taxes hiked by a massive seven percent in the New Year, but yesterday the Spanish government capped the January tax increase at two percent. Much less than seven percent, but still enough to lead to another increase in ticket prices as airlines continue to battle to meet the extra security costs and the unpopular airport tax hike introduced at the start of this year after a five year freeze. AENA wanted airport taxes to rise by the rate of inflation, two percent, plus an extra five percent at the country's main airports, such as Barcelona, Madrid and Palma. For medium-sized airports, AENA wanted a two plus two percent increase and a tax hike of just two percent for its smaller airports.
However, the Spanish government considers that an across the board two percent rise for 2004 is “reasonable.” AENA claim that the government's airport tax freeze over the past five years has cost AENA eight percent in revenue, hence why it was pushing for a major tax hike for next year. But, needless to say, the airlines were bitterly opposed to such a steep increase, as were consumers groups.
AENA claimed yesterday that the increases would have made little or no effect to ticket prices, but the airlines, already running on much tighter operating budgets because of greater expenditure on security and the global drop in air travel, disagreed and lobbied the government hard, warning that further airport tax increases will lead to more expensive flights.