October 3, 2019 / 12:51 PM / 5 months ago

Spain plans loans, tariff breaks to gird tourism sector after Thomas Cook collapse

FILE PHOTO: A Thomas Cook airplane is seen at Ioannis Kapodistrias Airport after Thomas Cook, the world's oldest travel firm, collapsed, on the island of Corfu, Greece, September 23, 2019. Kostas Kousounis/Eurokinissi via REUTERS

MADRID (Reuters) - Spain is preparing a plan worth 300 million euros ($328 million) to shore up the economies of its sun-drenched tourist spots after the collapse of British travel group Thomas Cook TCG.L, acting Tourism Minister Reyes Maroto said on Thursday.

The 13-point plan includes cutting certain tariffs for airlines flying to the Balearic and Canary Islands, which include Mallorca and Tenerife and which attracted many of the 7.1 million passengers Thomas Cook brought to Spain last year.

While tourism accounts for some 11% of Spain’s economy as a whole, it makes up 35% of output in the Canary Islands, and 45% in the Balearic Islands.

The two regions lost a combined 700,000 bookings for the winter season with the collapse of Thomas Cook, Maroto said.

Smaller businesses whose trade was affected by the collapse would have access to a credit line worth up to 200 million euros under the plan.

Employers would be asked to pay lower social security contributions for their employees, broadening an incentive that was already available in the sector during the colder months.

The plan also foresees investment in promotion, and aims to “offer a comprehensive response to the whole range of problems caused by the collapse of Thomas Cook,” Maroto said.

The measures will be tabled for approval at a cabinet meeting on Oct. 11.

Reporting by Isla Binnie; Editing by Alexandra Hudson

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