Air travel tax take falls by 20% in June compared with previous year

THE GOVERNMENT raked in 20% less from the controversial air travel tax last month compared with the previous year.

Figures from Revenue show €9 million was collected in June from the air travel tax compared with €11.5m in the same month last year.

The Government announced the introduction of the travel tax in 2008 and stated at the time that it expected to raise €150m in a full year. It later revised that downward to €125m.

However, in the first six months of this year the take is almost €45m, which would indicate that it is behind target. Last year’s take was €84.4m for eight months.

Ryanair has constantly demanded that the Government abolish the departure tax saying that if it did the airline would add more routes in Ireland.

Airline analysts, anna.aero, recently blamed the Government’s €10 travel tax for Dublin emerging as the worst airport in Europe in an analysis of seat capacity.

It said that for the summer 2010 season airline seat capacity in Europe rose by almost 5% but capacity in Dublin is expected to fall by 9%, making it the worst performer among the 20 European airports surveyed.

Bloxham stockbrokers’ analyst, Joe Gill, estimates the tax could cost the economy around €450 million a year as tourists will stop coming to Ireland.

The travel tax came into effect at the end of March 2009, resulting in every person leaving Ireland travelling over a certain distance being forced to pay an extra €10 per flight.

Mr Gill said the tax was “regressive and ignorant of seasonal trends in air travel demand”.

As well as Ryanair, Aer Lingus and CityJet have also called for the scrapping of the tax.

Ryanair spokesman, Stephen McNamara said: “As confirmed by Ryanair when this tax was first introduced, we knew it would always be a self-defeating tax. This was confirmed in the publication of independent reports by Amsterdam Aviation yet all of these warnings have been ignored by Government.

“It is now clear that the revenue generated is far less than the negative financial impact, VAT receipts lost and increased social welfare payments as a result of driving tourism from Ireland. It’s time to axe the tax.”

Ryanair boss Michael O’Leary called the tax “disastrous” and said because of it traffic at Dublin airport in May fell 15% to 1.6 million and is on track to fall by a further 3m to just 17m passengers in 2010.