1-Sep-2010 12:22 PM

Irish tourist tax underdelivers for Government

Ireland's Government stated revenue from the country’s air travel tax has reportedly fallen 20% over summer (Irish Examiner, 31-Aug-2010). The tax generated EUR26.4 million over May-Jun-Jul-2010, a fall of 20% on 2009. The controversial tax was introduced in 2008 with the Government initially expecting to raise EUR150 million p/a. Gross revenue for 1HY2010 is EUR45 million. Aircraft movements at the country's busiest airports at Dublin, Cork and Shannon are down 15%, 12% and 45% respectively for 1HY2010.

Meanwhile, Ryanair has threatened to reduce services at Shannon Airport unless a 33% rise in passenger charges is reversed. Ryanair stated it is an "insane decision" by Shannon Airport to increase passenger charges from EUR9.50 per passenger to EUR12.65 from 01-Nov-2010.

Ryanair: "At a time when Shannon Airport should be lowering costs, particularly entering the winter, the airport has announced a crazy plan to raise passenger fees further by 33% ... This will further damage Shannon's flights, traffic and tourism business, since price-sensitive passengers simply won't pay these unjustified price hikes from a government-owned airport monopoly." Michale O’Leary, CEO. Source: Irish Independent, 31-Aug-2010.