Originally Posted by
EI-BUD
Spanair were often very extremely competitively price on domestic sectors inside Spain.
Well, these low prices had an explanation (not related to low costs). Here is the citation from 2010 (
barcelonareporter.com):
Airline Spanair signed a syndicated loan of 50 million euros with several financial institutions led by La Caixa
The Government, through the Institut Català de Finances (ICF), will inject up to 50 million euros for Spanair to secure the capital for the airline.
This operation shall remain "transitory and temporary", so that the ICF participation in the company lasts until other investors are incorporated into the capital of the latter, as the Government reported.
And the next citation is dated 15.11.2011 (
ELFAA):
The European Low Fares Airline Association (ELFAA) is forced to condemn once again the latest round of cash handouts to ailing airline Spanair, by the regional government and City Council of Barcelona - this time to the tune of € 25 million.
“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,” said ELFAA Secretary General John Hanlon.
The future of Spanair appears to depend on a partial take-over by Qatar Airways, although this has so far failed to materialise. In the interim the airline continues to rely on public money, with an estimate that – to date - €120 million has been poured in with no obvious benefit to the taxpayer and to the detriment of free and fair competition.