Spain’s Public Works Ministry on Monday announced incentives for airlines to make greater use of the country’s airports where traffic volumes have fallen – particularly at Madrid Barajas – after sharp rises in levies were imposed on carriers in 2012.
Public Works Minister Ana Pastor said that the government hoped the measure would increase traffic at Spanish airports by about 2 percent, equivalent to four million passengers.
The incentives will come into effect at the start of next year, and will benefit carriers opening new routes and those increasing traffic on existing routes. A discount of 75 percent of current levies will apply to airlines increasing traffic on existing routes and 100 percent for new routes. For existing routes, a 50-percent discount will be applied in 2014 and the remaining 25 percent in 2015, while for new routes there will be a rebate of 75 percent next year and an additional 25 percent the following.
The 2012 hikes were strongly criticized by low-cost carriers easyJet and Ryanair. The former closed its Barajas operating base in the summer of 2012 while Ryanair has reduced the routes it operates and the frequency of flights on them.
Passenger traffic at Spain’s airports in the first nine months of the year declined 4.9 percent to 16.5 million. The number of passengers handled by Barajas in September declined 11.5 percent after a fall of 11.7 percent in August. The problems at Madrid’s airport have been exacerbated by a restructuring drive by former flag carrier Iberia – which, along with its partners, has exclusive use of the facility’s Terminal 4 – involving the elimination of unprofitable routes.
The economy commissioner of the Madrid region, Enrique Ossorio, welcomed the move by the Public Works Ministry but argued that the rates charged “have to be cut further.” The number of foreign visitors Madrid received in August was down 22.2 percent from a year earlier.
The chairman of Aena, the state company that controls Spain’s airports, José Manuel Vargas, explained that airport fees account for between 8 and 16 percent of an airline’s total costs, while within such fees levies charged per passenger represented 70 percent of the total. Vargas estimated the impact of the discounts on Aena’s earnings of 50 million euros in 2014.
The discount system will involve an amendment to the draft 2014 state budget.