The National Markets and Competition Commission calculates that the increase in the residents' travel discount in the Balearics led to a 22% increase in air fares. As the discount went up from 50% to 75%, the increase in fares virtually matched this.
Towards the end of 2018, the commission started an analysis of the impact of the increased discount on fares and the number of flights. Between July 2018, which was when the increase was implemented for the Balearics, and December last year, there was a ten per cent increase in the number of flights. In the Canaries, where there was the same rise in the discount, there was a 15% increase in flights. Over the same period, air fares for flights between the Balearics and the mainland went up 22%. For Canaries flights there was a nine per cent rise. For inter-island flights, there were no significant increases in fares.
As far as the cost to the Spanish government was concerned, this more than doubled. The total spend on the discount subsidy was 309 million euros in 2016. Three years later it was 765 million euros. In order to minimise undesired impacts, the commission is suggesting, among other things, a fixed ceiling on the subsidised amount.