Abolish the €10 Air Travel Tax – BREEN

March 23rd, 2010 - Pat Breen

Speaking during the Fine Gael Private Members Motion calling on the Government to axe the Travel Tax, Deputy Breen said; I am currently compiling a report for the Council of Europe on the crisis confronting the European civil aviation industry.  As part of this work, I met the CEO of Air France-KLM last Friday in Paris, Mr. Pierre Henri Gourgeon.  He described Ireland‘s decision to introduce the €10 air travel tax in the middle of a recession as a disaster for an island nation that is so dependent on air access. He pointed out that the Dutch Government moved quickly to axe a similar tax when it was introduced in Holland, having witnessed the drafor the Council of Europe on the crisis confronting the European civil aviation industry.  As part of this work, I met the CEO of Air France-KLM last Friday in Paris, Mr. Pierre Henri Gourgeon.  He described Ireland‘s decision to introduce the €10 air travel tax in the middle of a recession as a disaster for an island nation that is so dependent on air access. He pointed out that the Dutch Government moved quickly to axe a similar tax when it was introduced in Holland, having witnessed the dramatic effect it had on passenger figures.  Schipol Airport lost over 1 million passengers following its introduction.

 

  When air services are axed or capacity is reduced, it hurts tourism, airlines, airports – including Shannon – and car hire companies.  It has certainly hurt our region.  Recently, I met a taxi driver who waited outside the terminal building at Shannon Airport from 7 a.m. to 3 p.m. before picking up his first run.  Bed and breakfast establishments, hotels and publicans are also feeling the pinch.  Airlines across the globe are axing jobs, including Aer Lingus.  Many workers at Shannon Airport are fearful for their future, having already made big sacrifices in their efforts to try to secure the airline’s viability.  There is also uncertainty about the future of its vital Shannon operations, including the maintenance base.

 

  We are now on the verge of losing a significant amount of Ryanair business at Shannon.  The arrival of Ryanair transformed that airport five years ago, delivering passenger numbers from 300,000 in 2004 to 1.9 million last year.  That was prior to the introduction of the air travel tax.  Several of Ryanair’s popular holiday routes were supported by people all over the west.  In addition, the entire western seaboard from Donegal to Cork now has no connectivity to the EU’s main administrative centre in Brussels, which is a disaster for companies in the region. 

 

  This week, a report in The Irish Times suggested that the Dublin Airport Authority is considering introducing a levy for passengers departing from Shannon.  We do not know if this levy is an additional tax, a proposal to transfer taxes paid by passengers directly to airlines, or simply another income stream for the Dublin Airport Authority to fund the costly T2 terminal.  Whatever the case and many issues have to be clarified in this respect, it is clear that before any further discussions take place on airline charges or additional levies, the €10 air travel tax must be abolished.  It has been a disaster for the aviation sector. 

 

  As Deputy O’Dowd said, Ryanair, Aer Lingus and CityJet do not often speak with one voice, but they have now called for this tax to be abolished.  Michael O’Leary has said that he will reinstate routes at Shannon and Dublin airports if the tax is abolished, which would bring more tourists into the country.  Last Friday, the CEO of Air France told me that it is only a matter of time before the tax is abolished anyway, as the loss of revenue for airlines, airports and the tourism sector far outweighs the amount of revenue collected from the tax. 

  I am disappointed there is not a single Cabinet Minister here.  Where are the Ministers for Finance and Transport?  Where are the Government backbenchers?  It shows the interest they have in the tourism sector and in abolishing the travel tax.  The Minister of State should tell the Minister to have the courage to call Michael O’Leary’s bluff on the travel tax in order to reinstate these flights.  Mr. O’Leary won the PR battle on hangar 6.  A wise man once said, “If you are willing to admit you are wrong, you are right”. 

  I congratulate Deputy Tony Killeen on his appointment as Minister for Defence.  He should have the courage to let Shannon‘s voice be heard at the Cabinet table.  This tax should be abolished because it is counter-productive.