Ferry company, Fred Olsen Lines, threatened to cut inter-island services and increase fares, claiming the government still owe the company money from the last quarter of 2011.
According to the fast-ferry operator, it is still owed around 18 million euros in subsidies from the Canary Islands’ administration and has threatened to cut services, resulting in lay-offs and ticket price increases to offset the 25 per cent government subsidy.
Olson’s fleet Manager, Juan Ignacio Liano, said the deficit could reach 21 million by the end of this year, a situation which could prove ruinous to the company.
The subsidies are paid by the Canarian government to offset the loss-making routes such as the one between Los Cristianos and El Hierro and half of the residents 50 per cent travel subsidy, the other half being paid by central government, the latter being paid in full and on time.
According to the company spokesman, if the situation is not resolved soon, the shipping line would have little option but to cut loss-making lines and reduce the frequencies of others, both of which, would inevitably result in a loss of jobs.