GRANADA city hall has refused to pay Ryanair a special grant to restart flights to the city.
The airline cancelled 28 weekly flights last May after the city refused to continue subsidising the service.
Ryanair had been seeking 300,000 euros from the city each year.
“While the airline’s flights were good for the region, the benefits were not great enough to justify paying Ryanair for the privilege,” said councillor Marífran Carazo.
The town hall argues it is impossible to restart the deal signed in 2005 even though the lack of flights is having a serious affect on local tourism. The airport has reported an almost 20 per cent drop in passengers in 2010 on 2009.
Problems started in 2007 when the City Hall said it would no longer give its 15 per cent share of the payment, which was also being met by hoteliers, the Chamber of Commerce, banks and the Sierra Nevada skiing resort.
The subsidy deals have been criticised by other airlines, arguing that they are anti-competition.
Provincial boss Antonio Martínez Caler said last year: “In mid-May, I received a phone call from Ryanair representatives stating the service to London was cancelled. Then on June 2, the company contacted me again asking for more money to save the flights.”
One Granada hotelier, who asked not to be named, said: “It is a scandal that Ryanair holds cities to ransom in order to bring in their planes.
“These sort of practices should be exposed.”
Fellow Irish airline Aer Lingus have recently announced they are to fly to the airport.