Palma.—Majorca's Hoteliers' Federation, the Balearic Business Association (CAEB), the regional small to medium-sized business association (PIMEM), the Chamber of Commerce and the Balearic government voiced their anger over a decision by Central Government's Public Works Minister to hike airport taxes in the Balearics by 5%. All organisations claimed that the price rise will mean that the Islands will have to struggle to make their tourist offer more competitive in the face of growing stiff international competition.

Both large and small business representatives said that any increase in costs, wherever it is imposed is likely to hurt tourism which is acknowledged as the driving force of the Balearic economy.

Juan Gual, President of the regional Chamber of Commerce, agreeing with fears that any further tax hike will damage the competitivity of the Balearics, yesterday appealed to Central Government to reconsider their decision.

Gual said that although the tax hike in Balearic airports is not as great as those being imposed in Madrid and Barcelona, “it has to be remembered that many national tourists to the Balearics use those two airports so the impact on the Islands is going to be twofold.” Alvaro Middelmann, Director of Air Berlin for Spain and Portugal described the airport tax price increase as “disastrous.” Outraged, Middelmann said: “We've already signed contracts with international tour operators which we have to honour so Air Berlin will have to foot the bill for any tax increase made at this stage.” Hoteliers Federation Managing Director Inmaculada de Benito said that for the Balearic Islands - unlike areas of mainland Spain - the issue is one of connectivity and any airport tax increase will mean that key client countries may consider that the region is now “simply too expensive to get to.” Meanwhile Central Government has told the Balearic authorities of the updating of air ticket prices on inter-island routes in the Balearics which will remain subsidised by the Ministry for Public Works. Air Nostrum, the airline covering the routes will increase tariffs by one euro on trips between Palma-Ibiza, Palma-Mahón, and Ibiza to Mahón.

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