So, will a reduction in airport taxes really mean lower fares? | Archive

The national minister for development, Íñigo de la Serna, has once more urged airlines to pass on the reduction in airport taxes to passengers and therefore cut air fares. The reduction of 2.2% comes into effect on 1 March, and there will be four further cuts, meaning a total reduction of 11% by 2021.

Following a meeting yesterday with airlines and air industry associations at which he explained the government's new airport regulations document, the minister said that there has to be joint responsibility between the government, Aena and airlines. While acknowledging the government has no legal powers to force a cut in ticket prices, he again asked for one. "We know that this will improve competitiveness but we also believe that the reduction should be reflected in what is charged to passengers." He suggested that the airlines were "receptive" to the government's request.

As for the regulations document, De la Serna said that it creates a stable framework for the next five years and will enable the programming of investment and new routes. Aims are to increase airport capacities and improve quality of service to passengers.

Estimates by the ministry for Aena passenger growth have been revised upwards to 250 million passengers by 2021, although Aena's own forecast has a figure of almost ten million fewer. There is, according to the minister, scope for many more passengers, as he says there is global capacity in all the Aena airports for 335 million passengers.

Juan José Hidalgo, the president of Globalia, of which Air Europa is a part, said after the meeting that his airline will pass on the reduction. Likewise, Ryanair has indicated that it will, and it is perhaps in a stronger position than most airlines to benefit. Ryanair has reported that its prices fell in general by 17% in the final quarter of last year, while passenger volume rose by 16% and plane occupancy was at 95%. The profit was still 95 million euros, which represented an 8% drop, something which Michael O'Leary attributes to the fall in the value of the pound.