The airport tax issue yesterday took another turn with Palma and Madrid clashing over the proposed increases, with Balearic Minister for Commerce Pere Sampol warning central governmment that the Balearics will suffer. Sampol pointed out that flight connections between the mainland and the island have already been reduced as airlines try to reduce operating costs and an increase in airport taxes, as the airline industry complained on Tuesday, will force operating costs up further, with passengers having to ultimately pay the price. The Balearic government wants domestic flights to the Balearics to de declared a public service, Madrid has been asked time and time again to give the proposal the green light, but Sampol fears that the Balearics will suffer further at the hands of the airport tax hikes. The Minister for Development, Francisco Alvarez-Cascos, however, told the Senate in Madrid yesterday that an increase in airport taxes “will not pose any risk to the future of the airline industry.” The Minister said that any further reduction in operations by Spanish airlines will not be caused by tax hikes, pointing out that the airline industry has continued to grow in the past, tax increases or not. He also pointed out that since September 11, fuel costs have fallen by 24 per cent which will compensate for any rise in airport taxes.

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