Minister reconsiders planned changes to Loftbrú subsidy

Infrastructure Minister Eyjólfur Ármannsson says he will review planned changes to Loftbrú, a scheme that subsidises air travel for residents in the regions, mbl.is reports.

The changes, announced before the weekend, would replace a subsidy of 40% of the fare with a fixed 7,000 krónur per flight leg from the start of next year. Eligible residents would continue to receive subsidies for up to six flight legs a year.

Ármannsson said the government is considering adding funding to raise the subsidy by about 2,000 krónur, to 9,000 krónur per leg. The scheme’s budget would increase to about 800 million krónur, from 600 million in recent years, he said.

He said the changes were intended to make public spending more predictable and ensure residents receive the same amount per flight leg. A percentage-based subsidy, he added, means the state automatically covers part of any fare increases, creating an inflationary incentive.

Ármannsson disputed claims that there had been no consultation with regional communities. He said a meeting was held on October 16 with representatives of the Icelandic Association of Local Authorities, Icelandair and Norlandia. Any further changes to the scheme would be submitted for public consultation, he said.