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Spanish Authority Advocates for Efficient Cost-Based Transport Subsidies to the Canary Islands

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The Spanish Competition Authority recommends that public subsidies for transporting goods to the Canary Islands should be based on the costs of efficiently managed companies.

07.12.2023 | Spanish competition authority


The Spanish Competition Authority (CNMC) has issued recommendations regarding public subsidies aimed at compensating the additional costs of maritime and air transport of goods to and from the Canary Islands. These subsidies are currently determined by various ministerial orders, but the CNMC suggests that they should be calculated based on the costs incurred by efficiently managed companies.

The CNMC emphasizes the need for a thorough evaluation of the effectiveness of these subsidies once granted. This recommendation aligns with previous reports concerning earlier ministerial orders, advocating for a more structured approach to subsidy calculations.

Key recommendations include: basing subsidies on the cost structure of efficiently managed companies, providing better justification for variations in standard costs, and enhancing ex post evaluation measures to assess the effectiveness of the subsidies. Additionally, the CNMC calls for the development of an alternative methodology for determining standard costs, incorporating new elements for greater accuracy, such as detailed cost analysis by type of goods.

In studying air transport costs, the CNMC advises considering factors such as distance, time, fleet type, average route occupancy, and utilizing specific sectoral information on prices and labor costs. This report was issued at the request of the Ministry of Transport, Mobility, and Urban Agenda, under the authority granted by relevant competition laws.

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