Business Budget 2019

Friday 24 May 2019

Ryanair may expand services after axing of travel tax

John Mulligan

John Mulligan

AIRLINES and airports have welcomed Finance Minister Michael Noonan’s decision to axe the €3 air travel tax.

Aer Lingus said that the tax – which had initially been introduced in 2009  and is levied on passengers departing from Irish airports – had damaged air traffic demand.

“It has always been Aer Lingus' position that the ATT caused a lessening of demand for air travel and was therefore counterproductive from an Irish macro-economic viewpoint,” said a spokesman for the airline.

Ryanair also welcomed the removal of the tax. It has long campaigned against air travel taxes imposed by governments throughout Europe.

While the airline didn’t immediately say whether it will expand services to and from Ireland as a result, aviation sources told the Irish Independent that the low-cost carrier may unveil additional services within weeks.

Aer Arann – which operates Aer Lingus Regional services and which is controlled by UK transport group Stobart – also welcomed the abolition of the tax but called on the Minister to axe it from January rather than waiting until April 1.

Shannon Airport chief executive Neil Pakey said the removal of the tax could tip the balance for the airport – which now operates as a separate entity to the Dublin Airport Authority (DAA) – in terms of attracting new services.

Minister for Transport, Tourism and Sport, Leo Varadkar, said removing the tax is a welcome move to generate new airline routes into Ireland.

“This represents a further boost for Irish tourism and the local economies,” he said. “I will be carefully monitoring the response of airlines and the tax can be re-imposed next October if the response is not sufficient,” he warned. “The Government will build on all these tourism measures next year, and on the great performance of tourism in 2013, and will make €24m available for tourism capital projects in 2014.”

The DAA also welcomed the move.

“Passenger numbers at Dublin Airport have increased by 1m over the past 12 months and we expect Cork Airport to return to growth next year,” said a DAA spokesman. “Anything that is positive for the Irish aviation sector is to be welcomed.”

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