Ryanair: Travel tax costs €482m, 3,000 jobs & 1.2m departing passengers
26-Nov-2009 A report published today (26th Nov) by aviation experts, Amsterdam Aviation Economics, confirmed that the Irish government’s €10 travel tax will result in revenue losses of €482 million, up to 3,000 lost jobs and 1.2 million less departing passengers, yet will generate just €116 million in tax revenues in the first year following its introduction.*
The report, which was commissioned by Aer Lingus, Cityjet and Ryanair, who between them account for 83% of air travel passengers to and from Ireland, also warned of further losses to the Government as a result of its travel tax when reduced income tax, increased unemployment benefits, reduced VAT receipts and declining corporate tax are taken into account.
The chief executives of Aer Lingus, Cityjet and Ryanair again called on the Irish Government to axe the €10 travel tax which has had a devastating impact on airport traffic and visitor numbers since it was introduced on 30th March last.
Christoph Mueller (Aer Lingus), Geoffrey O'Byrne-White (Cityjet) and Michael O'Leary (Ryanair) said:
"This tax is completely counter productive and costing the country more than it can ever hope to generate. It does not make sense to sacrifice huge revenues and lose jobs and passengers by imposing a tax which will generate just €116 million. We have always warned that the direct revenue generated by the travel tax would be significantly less than it would cost the State when the adverse impact on business, tourism, jobs and lost taxation receipts were taken into account. This view has now been vindicated by the findings of today's report".
The report found that the Irish airlines have absorbed most of the tax and have been forced to reduce capacity and move aircraft to bases outside Ireland as a direct result of the imposition of the tax.
Jan Veldhuis of Amsterdam Aviation Economics said:
"Our analysis clearly demonstrates that the travel tax in Ireland has resulted in a decline in revenues of a far greater magnitude than the tax likely to be collected. Airlines have had to absorb the tax in lower fares to maintain volumes and, as this will be unsustainable, capacity will further reduce as airlines continue to move aircraft to lower cost markets where no travel tax applies. This will have a further detrimental impact on the Irish economy and the tourism industry. The reduced airline network is impacting on connectivity to Ireland, making it less attractive to visit and to do business in Ireland, which is an impediment to economic recovery".