03/08/2011

Republic's €3 Air Tax Remains In Place

The Irish Republic's government has decided to retain their 'flight travel levy' pending a further review next spring.

However, budget airline Ryanair has taken exception to the move and has rejected claims that it was not committed to bringing in additional passengers when the tax is abolished.

As part of the Jobs Initiative, it was originally announced that the €3 'Travel Tax' would be suspended subject to a deal being reached with airlines to re-instate cancelled routes and restore lost capacity.

Now, in considering alternative proposals, the Dublin Minister for Transport, Leo Varadkar, made clear that the objective of the initiative was to increase the number of tourists travelling to Ireland; not to increase the number of Irish people using the State's airports to travel overseas.

Minister Varadkar stressed that he remains open to discussions with the airlines and the option remains to suspend the tax next year should there be progress in these discussions.

In the meantime, he said a significant proportion of the revenues taken in from the €3 travel tax will be used to support inbound tourism.
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This support will see a fund of €8.5m being used for co-operative marketing with airlines, airports, ferry companies and tour operators on inbound routes into Ireland with particular focus on the UK regions, the United States, Germany, France and the Benelux countries.

Minister Varadkar said: "I am disappointed that it was not possible to come to an agreement with the airlines. I could not agree to foregoing significant revenues in taxes without a solid commitment from the airlines on the restoration of key in-bound routes and capacity.

"While the airlines did welcome the initiative some of the airlines were not in a position to make commitments on increased capacity due to the uncertain economic situation. This is entirely understandable."

Minister Varadkar continued: "In addition, the new routes offered were predominantly to Mediterranean hotspots which would actually have taken many more people out of the country than they would have brought in. However, I remain open to discussions with the airlines and the Government will review the travel tax again in spring 2012."

Minister Varadkar concluded: "In the meantime, Tourism Ireland will lead the marketing campaign to promote inbound travel into Ireland in co-operation with airlines, ferry companies, tour operators and airports.

"This could take the form of advertising or promotions. Airlines, ferry companies, tour operators and airports participating in the programme will be expected to make a contribution to the cost thus leveraging a final investment in excess of the Government contribution," he said.

(BMcN/BMcC)

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