BA chief urges scrapping of €10 air tax on visitors

THE CHIEF executive of British Airways has called on the Government to scrap the €10 air travel tax on visitors into Ireland, saying the airline would not fly new Irish routes due to high airport charges and weak economic domestic conditions.

Irishman Willie Walsh described the Government’s travel tax as “crazy”, saying it was “counterproductive” for business and tourism.

The Dutch scrapped a similar tax as the revenue generated from it was offset by a fall in economic earnings, which was three times the tax revenues, as a result of people not travelling, he said.

“Look at the number of overseas visitors here – is it all down to the tax? I don’t think so. Is the tax a factor in all of that? Absolutely,” said Mr Walsh, who was in Dublin this week to speak at a Trinity College business alumni event.

He strongly disagreed with any claim that Dublin airport competed with Belfast. Competition between airports would lower airport charges, which would lead to more flights and visitors, he said.

He ruled out launching any new BA flights into Ireland, but said if the airline’s relationship with Aer Lingus on the Dublin-Heathrow route changed, the company could consider launching on the route because of connecting flight traffic from Dublin.

“Ireland is going to suffer because of weak economic conditions . . . It is not one of the destinations that is high on our agenda.”

Reduced passenger numbers from Dublin travelling on long-haul flights via Heathrow hit BA revenues, he said.

The airline earned €60 million from Ireland in 2008, down from €88 million the previous year.

BA would gradually increase the number of aircraft on the business-only route from London City Airport to JFK in New York, which stopped for refuelling and customs and immigration checks at Shannon airport, said Mr Walsh.

The airline has two Airbus A318s on the route and could increase this to eight-10 craft over “a sustained period of growth”.

Shannon would benefit from BA passengers spending at the airport, expenditure on fuel and airport charges and the international profile of the route, he said.

Mr Walsh, a former chief executive of Aer Lingus, said he did not think there was any value in trying to acquire the part-nationalised airline, given the Government’s 25 per cent stake and Ryanair’s 29 per cent shareholding.

Aer Lingus’s future lay within a large group, he said. “I feel sorry for them [Aer Lingus], but I don’t think there is much of a future for them as a niche carrier. I can’t see how they are going to grow.”

BA’s protracted battle with striking cabin crew was being fought to protect the airline and ensure growth in future, he said.

“Our employee costs are significantly out of line with our competitors – we are tacking a cost base that is inefficient and that needs to be brought back into line, or the business has no future,” he said