Ryanair calls for airport travel tax to be replaced with levy

RYANAIR HAS urged the Government to replace its new airport travel tax with a levy "charged as a percentage of the passenger fare", claiming that the Government's revenue-raising measure will hit Shannon airport hard.

Ryanair chief executive Michael O'Leary has warned there would be "tumbleweed" at Shannon next year if the planned €10-a-flight levy went ahead.

A spokesman for the airline said yesterday that the Irish tourism industry would "sink under the weight of this new tax".

"The Government should scrap the €10 travel tax in its current format and introduce a tax which is charged as a percentage of the passenger fare."

Minister for Finance Brian Lenihan retained the tax in the Finance Bill, published last week. However, he extended provisions for a lower tax rate of €2 a journey on short trips.

In response to concern expressed by regional airports that they would not benefit from the €2 rate for British trips, Mr Lenihan said it would apply to departures from "any Irish airport where the destination is 300km or less from Dublin airport".

Last week the Belgian government scrapped plans to introduce a €10 passenger tax after protests from local government, airports, airlines and tourism groups.

A spokesman for Ryanair called on the Government to follow suit. He said Shannon was becoming increasingly reliant on Ryanair traffic, adding that the travel tax would result in a reduction of up to 75 per cent of Ryanair's passenger numbers at the airport by winter 2009.

"The Finance Bill changes the Government made in relation to this tax are simply rearranging the deckchairs on the Titanic," the airline's spokesman said. "The Irish tourism industry will sink under the weight of this new tax."

Clare TD Pat Breen (FG) said the changes would level the playing field for Shannon airport. "However, I believe that the introduction of this travel tax is ill-advised at a time when the tourism sector in this region is in crisis."

He added that "in practice, once a levy like this is introduced there is no turning back and the likelihood is that it will be increased annually.

"I am also concerned that the introduction of this tax will add further administrative costs to the airlines operating to and from Shannon. Ryanair have already threatened to reduce services through the airport and Aer Lingus has warned that it will add substantially to their cost base next year.

His party colleague, Joe Carey TD, said: "The Minister is trying to tax the airline industry out of recession. I maintain that this travel tax will have a negative impact on passenger numbers and as a result will impact on tourism and business concerns."