Sunday 22 September 2019

Ryanair and Aer Lingus advance cases for return of €120m in air tax

Rivals Aer Lingus and Ryanair have each been suing the Revenue Commissioners and the Department of Finance. Photo: Bloomberg
Rivals Aer Lingus and Ryanair have each been suing the Revenue Commissioners and the Department of Finance. Photo: Bloomberg
John Mulligan

John Mulligan

Ryanair and Aer Lingus are understood to have secured further discovery from the Department of Finance and the Revenue Commissioners in their battle to recoup as much as €120m in air travel taxes they paid between 2009 and 2011.

The airlines have each been suing the Revenue Commissioners and the Department of Finance for more than €60m.

Justice Max Barrett was due to hear arguments by both airlines in relation to ongoing discovery tomorrow, but it's believed that the hearing will be adjourned.

The air travel tax, which has now been suspended, was introduced in 2009 as an urgent revenue raising measure in the depths of the financial crisis.

Earlier this year, Ryanair had sought judgment against the Department of Finance and the Revenue Commissioners, alleging that they had delayed in complying with court orders that they provide information that Ryanair wanted to pursue its case.

However, by the time the motion was to be heard by the court in February, it transpired that discovery had been made.

But it's understood that Ryanair was not subsequently happy with the level of disclosure, and was preparing to go to the High Court again to argue for more.

It's believed that Ryanair is now satisfied that the relevant disclosures have been made.

The airlines declined to comment, as did the Revenue Commissioners.

Introduced in 2009, the travel tax initially levied a €2 charge per passenger on flights up to 300km from Dublin, and €10 for distances over that.

But on foot of a complaint by Ryanair, the European Commission found that the lower levy rate amounted to illegal state aid, because it benefited airlines that primarily operated shorter routes.

Following the Commission's ruling, the Government scrapped the two-tier levy system and in 2011 introduced a flat €3 tax per passenger.

The air travel tax was then suspended in 2013.

The European Commission then told the Government that it would have to collect from both Aer Lingus and Ryanair, the difference between the two rates - €8 - that had previously been in operation, in respect of each passenger that had been charged the lower €2 levy between 2009 and 2011.

That was meant to equalise the levy that had been charged to ensure that no airline had had an unfair financial benefit.

Ryanair and Aer Lingus both successfully appealed that decision to the European Union's General Court, saving them millions of euro each. However the European Commission has sought to have that General Court decision overturned.

The two carriers sued the Revenue Commissioners and the Department of Finance for the return of air taxes they had paid up to March 2011, when the new flat rate was introduced.

Irish Independent

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