Travel tax will prove to be ‘tourism suicide’

RYANAIR will announce cutbacks at Shannon and Dublin airports in the coming weeks as a direct result of the Government’s €10 air passenger tax.

Ryanair chief executive Michael O’Leary said the tax, which comes into effect on April 1 will result in “tourism suicide”.

Ryanair said less than 15% of its traffic originates in Ireland so it said the tax will not hurt it as much as it will hit Aer Lingus.

Mr O’Leary called the travel tax, which was announced in last year’s budget an “idiot measure” that will result in less people visiting Ireland.

He said a similar tax failed in Britain andHolland and he predicts the same will happen in Ireland.

Mr O’Leary also said Ryanair would not waste any more money on a third bid for Aer Lingus.

The airline would not rule out selling its near 30% stake in Aer Lingus saying that if an offer was made it would consider it.

The airline chief also said there is no guarantee that it will come back in one or two years time with another offer for Aer Lingus.

“We came a lot closer this time than we did last time,” said Mr O’Leary.

He added that Aer Lingus is going along a “Waterford Wedgwood road” rather than a Ryanair road.

When asked why the airline is not looking to dispose of its Aer Lingus stake, Mr O’Leary said it was because he doesn’t think there is a buyer.

He said Ryanair will continue to write down its stake in the state airline, with losses from the stake in the fourth quarter expected to hit €63m.

Ryanair withdrew a takeover bid last month for Aer Lingus after the Government rejected the transaction.

The Government, whose 25% holding inAer Lingus is second only to Ryanair’s stake, said that the €748m bid

undervalued Aer Lingus and a merger of the Dublin-based carriers would harm competition.

Ryanair deputy chief executive Michael Cawley said there is “nothing obvious” as alternative acquisition targets, and Ryanair will focus on expanding existing operations.

Ryanair also said that it will be making a base announcement in the coming weeks and it could move into bigger European airports this year but it said any expansion plans will come from whichever bases offer it the best package and deal.

Mr O’Leary said Ryanair will increase baggage charges again over the coming weeks until at least 25% of its passengers are checking-in online.