The reduction in airport taxes could mean lower fares. But will they?

29-07-2016Teresa Ayuga

The minister for development, Íñigo de la Serna, has called on airlines to reflect the reduction in airport taxes in the price of tickets. (The reduction of 2.2% per annum from this year until 2021 was announced last week.) He acknowledged that the Spanish government has no legal capacity to enter into a "strictly private" issue, but he hopes that the reduction will mean cheaper fares.

The cut to airport taxes was formally approved by the cabinet on Friday and it is included in the first document for airport regulation (DORA); this also includes enormous investment in airports over the next five years. De la Serna said that DORA will improve the positioning of Spanish airports in the global market, noting that it has been well received by the tourism industry: four out of five tourists who come to Spain do so by plane. The document also establishes that airport taxes will not rise in the five years from 2021. If the law hadn't been amended, he explained, there would be increases of up to five per cent.

He said that the regulations will serve to consolidate Aena's position as a leading airport operator - it has sixteen overseas interests in addition to the 46 airports and two heliports in Spain - and he described Aena as a "solid and solvent company" which is currently ranked ninth on the Ibex 35 of leading Spanish companies in terms of market capitalisation.

The Majorca Hoteliers Federation has expressed its satisfaction with the tax reduction. Its president, Inma Benito, said that the national government had "finally" taken the decision to reduce taxes, despite Aena having wanted to freeze them, adding that she considers it necessary to work to improve the discounts in winter in order to incentivise more air traffic.

Benito stressed the importance of the reduction meaning lower air fares. This will be "fundamental" in order to "gain competitiveness and a comparative advantage over other destinations". She observed that while the Balearic government had been demanding a cut in airport taxes in order to boost competitiveness, it had introduced the tourist tax, which does not assist competitiveness.

The association of Spanish air transport companies has also welcomed the reduction. This will contribute to stimulating demand, incentivising air traffic and benefiting the end-consumer. It was therefore hinting, without saying so definitively, that De la Serna's hope for lower fares will be fulfilled.

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Malcolm.withall / Hace over 4 years

Lower Fares !!!! fat Chance

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E Weldon / Hace over 4 years

Easy! Pass the reduction to holidaymakers- don't charge them the tourist tax at their hotel!

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mike / Hace over 4 years

Don't hold your breath air fares won't cost any less like anything else when prices rise they stay risen even when other factors reduce the cost the only ones to benefit will be the airlines the only way the minions like us benefit is when a price war starts or competition becomes even greater example monarch just survived last year at Birmingham now jet2 have arrived along with Ryanair monarch will have to be very astute with prices it only needs easyJet now and we will definitely benefit,

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S. / Hace over 4 years

Landing Fee €4,500 , 2.2 % is a €110 discount. I suppose that may reduce an Air Fare by €25.00. There are major problems at Palma Airport. Recently I flew to Stansted. The Aircraft was full. Loading was very slow. The Captain constantly asked for passengers to get seated quickly. He missed the SLOT , and we had to wait an hour for a slot to taxi the aircraft. Palma handling is poor. Air Traffic is poor. But the tax reduction will not improve their efficiency. It may assist Tourists if passed on in the Air Fare cost, to pay their Tourist Tax at he Hotel.

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