Criticism of 'stupid' travel tax as airlines announce new services

THE GOVERNMENT is losing more in VAT it would receive from growing passenger numbers than the €70 million the exchequer gets from the €10 travel tax, Ryanair chief executive Michael O’Leary claimed yesterday.

He said the travel tax resulted in the State losing around four million tourists last year. A further three million visitors would be lost this year.

Mr O’Leary was speaking in Cork where he was announcing details of seven new summer services to Bordeaux and La Rochelle in France, Alicante, Barcelona, and Malaga in Spain, Faro in Portugal and Lanzarote in the Canary Islands.

He said the new services would be on average 40 per cent cheaper than similar services offered by Aer Lingus, and were due in part to Aer Lingus’s higher fares and in part to Budget Travel’s demise and the drop in charter capacity.

However, Ryanair’s announcement was matched by Aer Lingus, who yesterday launched what it described as its “largest ever summer programme at Cork”, announcing an extra 44 flights per week to bring weekly departures to the UK and Europe to 140.

Some 22 routes will be served directly from Cork, including Alicante, Barcelona, Faro, Lanzarote, Malaga and Nice. Eight routes are being added with new services to Bristol, Cardiff, Edinburgh, Glasgow, Jersey, La Rochelle, Gatwick and Tenerife.

Aer Lingus chief commercial officer Stephen Kavanagh said the development was further evidence of the company’s commitment to building a route network to serve the business and leisure needs of Cork and the surrounding region.

Mr O’Leary said Ryanair’s business would grow by around seven million passengers this year. At the same time, visitor numbers to Ireland were set to fall by three million due to the travel tax and high airport charges. “The VAT receipts alone on the lost visitor spend was more than the travel tax, never mind the airport losses. Stupid.”

He expected the charge to be dropped by the end of the year, or early in 2011, as the impact on tourism and jobs in hotels, restaurants and airports becomes more stark.