Varadkar: I'll keep travel tax if airlines don't open new routes
Published 26/04/2011 | 05:00
TRANSPORT Minister Leo Varadkar has threatened to retain the controversial travel tax unless Ryanair and Aer Lingus open new routes into the country.
Mr Varadkar has also revealed that he is willing to look at part-privatisation of Cork and Shannon airports as a way to make them independent of Dublin.
The Government has promised to scrap the €3 travel tax -- reduced from €10 in the last Budget -- in next month's jobs budget. But in an interview with the Irish Independent, Mr Varadkar said he has told the airlines he definitely will not abolish the tax if they do not agree to open more routes.
His alternative, in the event of the airlines failing to respond, is to seek agreement from the Department of Finance to put the proceeds of the travel tax into tourism promotion.
"I'm not interested in abolishing the travel tax or reducing airport charges so that Paddy and Mary can go to Palma or Mallorca or Lanzarote. I accept that may be a side effect of the deal, but overall it has to be about tourists," he said.
"I think Ryanair could do a lot for Irish tourism and I think we could do a deal both with Ryanair and Aer Lingus, but Ryanair probably has the capacity to deliver more people than Aer Lingus for obvious reasons, but at the same time, if we can't deliver a deal, there'd be no problem going head to head," he added.
Mr Varadkar said he was making good progress with Aer Lingus, which wants to work on marketing new routes. But he revealed Ryanair "want it all their own way" and negotiations with the airline were tricky.
"The travel tax being abolished, they are taking it for granted," he said. "But it's not for granted so what they are looking for as well is a deal on airport charges, which we are willing to look at.
"And even if it (the travel tax) does go, it could be reintroduced."
Mr Varadkar said his interaction with fellow firebrand, Ryanair chief executive Michael O'Leary, has been good so far.
"I've met Michael O'Leary one-to-one and will meet him again and the department has been meeting him, which is interesting, because seemingly it was the first time the department ever asked to meet him," he said.
"I'd be happy to work with him. I'd be happy to take him on. We had a very good meeting. He brought the coffee and cakes. Very amicable."
Mr Varadkar said he wants more passengers coming to Ireland from Britain and Germany. And if the travel tax stays he would "be pushing an open door" with the Department of Finance to have the funds spent on tourism promotion.
"If we don't abolish it, bear in mind that's €30m. Now that certainly doesn't belong to me. That's Exchequer money but we can retain the €30m and use it for tourist marketing for specific routes," he said.
Regarding the future of the country's airports, Mr Varadkar said he had an "open mind" on the options. He said it would be desirable to proceed with the long-standing plan to separate Cork and Shannon from Dublin to allow the three airports to compete for business.
But he says Cork and Shannon are losing a lot of money and Dublin is carrying an enormous debt from Terminal 2.
Mr Varadkar said an option is to part-privatise Cork and Shannon to avoid lumping their debts on to Dublin and give them independence.