For 2020, the national ministry for transport needed to find seventy million euros more than had been budgeted for Balearic residents travel discount subsidies.
The budget was 117 million euros. In the end, the cost to the Spanish government was 186.97 million. A key reason was that the prices charged by airlines went up - the 75% discount subsidies are paid on the basis of the price of air fares.
Xavier Ramis, the director general for ports and airports in the Balearics, says that there was tremendous fluctuation in air fares. Despite there having been fewer passengers, when demand rose as restrictions began to be eased, it was of sufficient level for airline pricing algorithms to respond accordingly. He notes that prices for ferries rose by up to 30%, while the average increase for flights was 7.3%. On occasions, the increase was by as much as 15%.
Ramis insists, as have others, that the increase in the discount from 50% was for the benefit of travellers - "it was not in order to benefit the companies".
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