Business Irish

Friday 17 August 2018

Airlines step up court fight to recoup air tax millions

Aer Lingus CEO Stephen Kavanagh. Picture: Mark Condren
Aer Lingus CEO Stephen Kavanagh. Picture: Mark Condren

Tim Healy

Ryanair and Aer Lingus are claiming hundreds of millions of euro from the State in repayments of the air travel tax, the High Court heard.

The airlines are also seeking damages over what they saw as the unlawful levying of a travel tax between 2009 and 2011.

On Tuesday, Mr Justice Max Barrett made rulings in relation to six cases linked to the tax.

He said there should be a unitary, rather than modular, trial of the separate cases involving the State, Aer Lingus, Ryanair and Aer Arann.

The tax was introduced at €2 and €10 rates in 2009 then changed to a single €3 rate in 2011 following an European Commission State Aid decision. In April 2014 the tax was scrapped.

Ryanair and Aer Lingus have sought repayment of the allegedly unlawfully paid tax for the period when it was levied. The judge said that could amount to between €100 and €200m.

Both airlines are also seeking damages.

The Minister for Finance and the State, in their proceedings, sought to recover the unlawful State aid found by the European Commission to have been in place as a result of the variable rate. A lower rate of €2 for flights under 300km, versus the €10 for longer flights was unlawful State aid, the Commission found. In December, 2016, the European Court of Justice said the amount to be recovered was the difference between the lower and higher tax.

Aer Arann reached a settlement agreement with the State in 2015 in relation to its own proceedings but was still a defendant in the unlawful aid case brought by the State.

Aer Lingus, headed by CEO Stephen Kavanagh, pictured, and Ryanair sought a modular trial of the cases dealing with liability and the sums involved.

Mr Justice Barrett said there would be a unitary trial but said it was unlikely the cases could be heard until later this year or early next year.

Irish Independent

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