Regional airports united in opposition to travel tax

Regional airports united in opposition to travel tax


Anton McNulty

THERE may be a ray of light for regional airports like Ireland West Airport Knock after a report revealed that the Government were planning to overhaul the Air Travel Tax imposed in the budget.
Last week, five of Ireland’s regional airports – including Ireland West Airport Knock – called on the Minister for Finance to withdraw the air travel tax prior to its enactment in legislation.
In a joint letter to Minister Brian Lenihan TD, Knock, Donegal, Galway, Sligo and Waterford airports outlined their strong opposition to the proposed new Air Travel Tax which was revealed in the recent budget. The new tax is due to come into effect in March 2009 and passengers will pay a general rate of €10 for air journeys exceeding 300km and €2 for journeys under that distance.
The regional airports along the west coast feel they will be further marginalised because of the tax, which, they say, provides positive discrimination to Dublin Airport. All destinations from Dublin to the major airports along the west coast of the UK – including Manchester, Liverpool and Glasgow – will cost only €2, compared to €10 from the majority of the other regional.
However, The Sunday Times newspaper revealed that in order to remove the advantages Dublin airport has over its western counterparts, officials in the Department of Finance have indicated that changes to the tax will be introduced in the this week’s Finance Bill.
While the reform of the tax had not been finalised, it is expected that that changes would be revenue-neutral. Options available to Minister Lehihan include reducing the 300km limit to about 150km - which would hit all flights to Britain with a €10 levy. However, because this may add pressure on airlines and airports, it is expected a new levy of €7 or €8 could be introduced for destinations in the western half of Britain.
Mr Robert Grealis, CEO of IWAK, said that the existing air capacity the regional airports have could be lost as a result of this tax because airlines will choose to fly to high population city destinations in Europe over Ireland’s regions. He added that any benefits of the new tax will be far outweighed by the loss of revenue to the regions.
“It is essential that Minister Lenihan and our Government representatives consult with the regional airports and recognise that Ireland’s regions rely on tourism to a far greater extent than Dublin, which is supported by many other industries. The west and north-west region in particular is very much under-served with flights having just three per cent of the total departing passenger market in Ireland and therefore an amendment abolishing the tax from the regional airports serving this catchment will have negligible effects on the overall revenue targets projected by the Government,” he said.
Last week, the Minister for Community, Rural and Gaeltacht Affairs, Éamon Ó Cuív TD, admitted that the Air Travel Tax poses a problem for regional airports but claimed it will not be changed because it is bound by the rules of European law.
Local Charlestown councillor, Gerry Murray, said this was another example of an EU law which disadvantaged the west of Ireland, and said it should be challenged. He added that State aid funding for regional airports was also barred under European law but said this was lobbied against in Brussels. He claimed that concessions from that lobbying led to €27m of State aid going to Knock airport, and feels the same should be done to prevent the Air Travel Tax.