Friday 15 December 2017

Government ordered to recoup travel tax from airlines after Brussels ruling

John Mulligan

John Mulligan

THE European Commission has ordered the government recoup additional travel tax from Ryanair, Aer Lingus and Aer Arann after Brussels ruled some airlines had unjustly benefited from a two-tier levy introduced in the 2009 Budget.

The Government announced in 2008 that it was imposing a €10 travel tax per passenger on all flights leaving Irish airports where the destination was more than 300km away from Dublin.



All other flights attracted a lower €2 per passenger fee.



That was with a view to protecting more vulnerable domestic routes.



But the Commission said today that the lower rate favoured flights within Ireland and nearby parts of the UK. It said that this had given airlines operating such flights an “economic advantage over their competitors and thus distorting competition in the internal market”.



“To ensure a level playing field between airlines, the Commission ordered Ireland to recover this advantage from all airlines that had benefited from it,” it said.



The main beneficiaries, said the Commission, were Ryanair, Aer Lingus and Aer Arann.



That means that all three carriers could be forced to pay money to the Exchequer.



However, it’s not clear yet what their exposure might be.



Aer Arann – which now operates all its flights under the Aer Lingus Regional banner – was operating subsidised domestic routes between Dublin and Galway, Derry, Sligo, Donegal and Knock at the time the travel tax was introduced.



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