Aer Lingus may cut routes over €10 tax

AER Lingus could cut routes from Shannon and Dublin this winter if the Government does not scrap the air travel tax which is causing “serious damage” to the airline.

Chairman Colm Barrington, in a letter to Finance Minister Brian Lenihan, said the airline’s winter business is “much weaker” than summer and advance bookings and expected returns for the forthcoming winter are “significantly behind those of previous years”.

The airline said it believes the €10 air travel tax, which was announced last year, will have a “significant bearing” on its ability to operate a full schedule of flights compared to last winter.

“These challenges are most acute on our long-haul routes, particularly from Dublin to both Washington and San Francisco and on all our routes to and from Shannon,” he said.

Aer Lingus spokesman, Enda Corneille refused to give any further detail on the situation yesterday. The airline had been expected to announce its winter schedule this week but Mr Corneille said the delay in the announcement of the schedule is not connected with the letter.

This is the third letter Aer Lingus has sent to the minister since October asking for the abolition of the tax. It has not been invited to any meeting with the minister.

Ryanair has also continuously asked the Government to scrap the tax.

A Department of Finance spokesperson said yesterday that the minister tried to be “as fair as possible in looking at areas for additional tax revenues in the context of the fiscal challenges the country now faces”.

“Aer Lingus cite, in particular, concerns they have about their winter long-haul schedule and the impact of the tax on this.

“In that regard, it is not generally accepted that a €10 tax would have a material effect on decisions by either Irish people to travel long-haul in light of total expenditure involved for such a journey or for prospective tourists to Ireland from far-away destinations who would pay the €10 on their return journey,” he said.

Mr Barrington said the tax will have a “material and negative bearing” on the airline’s ability to maintain previous level of operations.

He said it is his “strong belief” that the tax is costing the country dearly and that the country is losing much more than the Government is gaining.

The department said revenues from the air travel tax are expected to yield €125 million in a full year.

Aer Lingus said it would not formally join with Ryanair to lobby Mr Lenihan. A spokesman for Ryanair said: “It’s about time Aer Lingus joins Ryanair’s calls for scrapping this regressive tax.”

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