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Legal bid for airlines to pay €16m travel taxes

By John Mulligan

Published 06/04/2016

Michael O’Leary
Michael O’Leary

The European Commission (EC) will tomorrow argue in court that Ryanair and Aer Lingus should be forced to hand over as much as €16m (£12.9m) to the Irish Government arising from the implementation of the now suspended air travel tax.

The Commission had previously argued that the way Ireland's air travel tax was structured meant shorter air routes had effectively benefited from illegal state aid.

It also wanted Ryanair to pay the Irish Government €12m (£9.7m) in air taxes, and Aer Lingus to pay €4m (£3m).

But last year, the two airlines successfully overturned the Commission's previous determination.

The EC will now plead at the European Court of Justice that its original finding should be retained and that the airlines should pay up.

The Irish Government introduced the controversial air travel tax in 2009. The urgent revenue-raising measure was pilloried by airlines, which claimed it would hinder passenger growth.

The new tax levied a €2 (£1.60) charge per passenger on flights of up to 300km from Dublin, and €10 (£8) for distances over that.

But Ryanair boss Michael O'Leary complained to the EC and the institution determined that the lower levy rate effectively amounted to a form of illegal state aid because it benefited airlines that primarily operated shorter routes.

Following the commission's ruling, Ireland scrapped the two-tier levy system and in 2011 introduced a flat €3 tax per passenger, which was suspended in 2013.

Belfast Telegraph

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