ELFAA condemns ‘latest round of cash handouts’ to Spanair

Spanair A320. Courtesy, Spanair

The European Low Fares Airline Assn. (ELFAA) is preparing a formal submission to the European Commission (EC) regarding the “huge amounts” of state aid to Spanair (JK).

According to ELFAA, JK recently received €25 million ($33.7 million) from the regional government and city council of Barcelona. This brings the total amount of public funds that have “been poured in with no obvious benefit to the taxpayer and to the detriment of free and fair competition” to an estimated €120 million, ELFAA said.

“This latest injection to keep Spanair afloat is not only a waste of valuable public funds, it is also a flagrant breach of European legislation with respect to competition and state aid,” ELFAA secretary general John Hanlon said.

“Barcelona is in the fortunate position of enjoying a vibrant and competitive marketplace for air travel. With Spain on the edge of an economic and financial precipice, it seems doubly unjust to the Spanish people that their own public money is being ploughed into failed business models, which deserve to be put out of their misery,” he added.

This is not the first time ELFAA has contacted the EC regarding Spanair. In November 2010, ELFAA called on the EC to carry out an urgent and full investigation into the decision by the Catalonia’s Generalitat Executive Council to authorize the Public Infrastructures Corp. to take a €20 million stake in the airline (ATW Daily News, Nov. 16, 2010). “This made the Generalitat the airline’s main shareholder and ensured that Spanair became a state-controlled company in all but name,” ELFAA stated.