The president of the Cabildo of Lanzarote, María Dolores Corujo, received this Monday the Minister of Public Works, Transport and Housing of the Government of the Canary Islands, Sebastián Franquis, in an act in which it was confirmed that the Island will be the first in the Archipelago to connect with Madrid on a journey on which a pilot Public Service Obligation (PSO) is applied.
Dolores Corujo stated the importance of this act for the Archipelago and for the Island, "since this is an initiative that has been demanded for decades and, for the first time, the Canary Islands and the Peninsula will be connected by a PSO."
"This first experience will take place here, in Lanzarote, through a direct connection with Madrid financed by the Government of Spain, for residents and non-residents, and therefore we are in luck," the president highlighted.
The Minister conveyed this decision to the president this Monday, after the Ministry agreed with the Ministry of Transport, Mobility and Infrastructure.
Pilot experience
Urban Agenda that this journey meets the appropriate requirements to implement the pilot experience announced last January, after agreeing with the Government of Spain on the possibility of implementing this measure as a pilot experience to limit the price of tickets between the Canary Islands and the Peninsula with the aim of restoring the tariff balance that existed previously.
In this line, Franquis pointed out that "what we are trying to achieve is to establish a maximum price that does not involve excessive intervention in the market to restore the tariff balance without undermining connectivity. We are looking, especially, to limit that increase that occurs in air tickets in a special and concrete way in summer and at Christmas, and for those who buy the ticket with little anticipation, so that there is a balance in the market. In short, it is about companies obtaining reasonable profits and the market being balanced. And the Lanzarote-Madrid route meets all the criteria in the initial study we have done, among others it has an occupancy rate of 85.8% in its flights, because 71% of its occupants are non-residents and because it operates 66 weekly flights."
The Minister informed that the route between Lanzarote and Madrid has also been chosen as it has a high number of passengers: between January and November 2022 a total of 524,134 travelers were registered, of which 375,804 were non-residents and 148,330 were residents in the Canary Islands, placing it as the third airport in the Autonomous Community in the reception of passengers from the national territory. In addition, three different airlines operate at the César Manrique Lanzarote International Airport for the same route, which allows analyzing the results of this PSO in a market with competition.
"What is intended with this pilot experience of the PSO, which will be applied experimentally for one year, is to restore the tariff balance that existed prior to July 2018," the Minister indicated, "at that time, when the 50% subsidy was applied, the market was perfectly balanced, the airlines made money with these routes with the Canary Islands and at the same time the prices were balanced in the market, which is what we are trying to achieve again with the application of this PSO. We cannot ignore that, after the application of the 75% discount, the Canary Islands-Peninsula routes experienced an average increase of 28%", added Franquis.
"Today we have decided on the route and the next step will be to set the maximum price, consult the sector and transfer the proposal of this PSO to the National Commission of Markets and Competition and the European Commission itself, with the aim of having all the guarantees and at the same time maintaining connectivity," concluded Franquis.
