Government washing their hands of any responsibility for the future Shannon Airport –BREEN.

February 28th, 2009 - Pat Breen

Fine Gael’s Deputy Spokesperson on Foreign Affairs and Clare T.D. Pat Breen said today that the Government has washed their hands of any responsibility for the future of Shannon Airport. Deputy Breen’s claims follow the Finance Minister’s refusal to review the imposition of the controversial €10 Air Travel Tax and the Ceann Comhairle’s refusal to allow questions to the Minister for Transport and Marine and the Minister for Arts, Sports and Tourism regarding the consequences of the imminent withdrawal of services by Ryanair from the local Airport.It comes as no surprise to me that this Government is once again washing their hands of responsibility for the future of Shannon Airport. We all know how low this Region features on the radar in the Department of Transport following the Heathrow Debacle last year.

Ryanair have cited the €10 Air Travel tax as the reason why they will be reducing services from Shannon at the end of March next, yet neither Minister Dempsey nor Minister Cullen can be bothered to meet with either the Airline or the Airport Authorities to discuss the fallout of this decision.”

Meanwhile their colleague the Minister for Finance Brian Lenihan has ruled out any review of the controversial tax and he claims that the Airline Industry “already has considerable preferential treatment” with the Commercial Airline Sector not subject to tax on Aviation Fuel.””

“The entire aviation sector worldwide is in crisis and the Irish Government’s solution to this crisis is to penalise the Airline and the Travelling Public by increasing stealth taxes.”

“I would appeal to the Government again to sit down with the relevant stakeholders to find a resolution to this problem, there is a window of opportunity between now and the 31st March 2008 and the Government should act.”

DÁIL QUESTION

To ask the Minister for Finance further to Parliamentary Question No. 205 of 11 November 2008, if he has plans to review the air travel tax in view of the announcement by a company (details supplied) to reduce their services at Shannon Airport; and if he will make a statement on the matter. – Pat Breen

* For WRITTEN answer on Wednesday, 11th February, 2009.

Ref No: 5149/09 REPLY

Minister for Finance (Mr Lenihan) :

I announced in Budget 2009 that an air travel tax will come into force in respect of passengers departing from Irish airports on and from 30 March 2009. A general rate of €10 per passenger will apply, with a lower rate of €2 for shorter journeys.

The Finance (No.2) Act 2008 confirms the introduction of an air travel tax from 30 March 2009. However, I took account of concerns raised by the regional airports particularly those on the western seaboard. The lower rate of €2 will apply to departures from any Irish airport where the destination is 300kms or less from Dublin airport. This means that all Irish departures to locations such as Manchester, Liverpool and Glasgow will be subject to the €2 rate.

We currently face significant financial challenges and the air travel tax is an important revenue raising measure.

Ireland is not unique in regard to applying a tax on air travel. A number of countries within the EU apply similar taxes including, the UK, France and the Netherlands, as do Australia and New Zealand. The proposed rates for the Irish air travel tax are not unreasonable both for shorter and longer journeys, when compared to rates in other countries.

It should be recognised that tourists will only be subject to the tax on their return journey. The additional €10 or €2 in the context of a much larger purchasing decision involving travel, hotel expenditures etc. shouldn’t have much of an effect on tourist numbers. I appreciate the airline industry continues to go through a difficult period. However, this difficult trading period has, in addition to weak world economic activity, been largely driven by a massive spike in oil prices. Oil prices have now halved from the all-time high prices experienced earlier in the year.

I tried to be as fair as possible in looking at areas for additional tax revenues. It is also worth noting that fuel used by commercial airlines is completely exempt from tax, so it’s a sector that already has considerable preferential treatment. I have no plans to review the air travel tax.