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Ticket Tax Will Damage Tourism and Devastate Shannon Says Ryanair

Air Transport News 17 Oct.08

Source: Ryanair 17/10/2008

Ryanair today (17th Oct) condemned the Government’s discriminatory €10 ticket tax as regressive, damaging to the Irish tourism industry (when visitor numbers are already falling) and devastating for Shannon where passengers and visitors are now facing a 100% rate of tax. The Government should realise that they can’t tax the tourism industry out of recession, they need to stimulate it.

Ryanair confirmed it would be seeking an urgent meeting with the Minister for Transport, to outline the devastating consequences for Shannon Airport’s traffic of this regressive tourist tax which will more than double the average air fare paid by visitors to Shannon throughout the Winter months.

Ryanair, is not opposed to a travel tax in principle (to help the Irish economy weather the current recession) and explained that this measure will only hit less than 15% of Ryanair’s total passenger numbers, but called for the restructuring of this tourist tax and other measures to create even greater savings for the Government as follows:

1. Ryanair calls for the ticket tax to be extended to passenger traffic on ferries, in order to level the playing field between aircraft and ferry traffic.

2. Ryanair calls on the Government to change the regressive flat rate tax into a progressive percentage tax of the fare paid. This would raise the same amount of revenue, but with a higher proportion of tax paid by higher fare business and transatlantic passengers, and a lower amount of tax paid on low fares tickets bought by price sensitive, lower income passengers. It is entirely unjust that a business passenger travelling across the Atlantic paying a €3,000 air fare is paying the same €10 ticket tax as a €10 fare passenger travelling on a tight budget.

3. Ryanair calls for the Government owned DAA monopoly to reduce its passenger taxes by 50% per departing passenger in order to reduce the double taxation being faced by departing passengers at Dublin Airport. It is entirely unfair that passengers are being taxed twice at Dublin Airport, once by the Government’s airport monopoly for €15 a departing passenger and now a second time by the Government with this €10 ticket tax.

4. Ryanair also calls on the Government to dispense with this ticket tax altogether and avoid damage to Irish tourism and instead raise even more money by:

a. Scrapping the current absurd PSO subsidy scheme which will save €16m p.a.

b. Closing Failte Ireland, the tourism quango which has a budget of more than €150m annually, but doesn’t deliver one additional visitor to this country.

Ryanair confirmed that it will now enter into discussions with Shannon Airport about the future viability of its 2 million passenger base there. Whilst passenger numbers and fares are viable at Shannon during the Summer months, the vast majority of passengers flying to/from Shannon during the Winter months are loss making since they pay an average fare of less than €10, and so this devastating travel tax will more than double the air fares these visitors pay and will see Winter traffic collapse at Shannon Airport next year.

Calling today for an urgent rethink on this tourism tax, Ryanair’s Michael O’Leary said:

“This Government must realise that it can’t tax the tourism industry out of a recession. As Ryanair has repeatedly shown, the tourism industry can only grow and thrive if it has lower access costs and not idiotic regressive taxation which hits the poorest most price sensitive passengers, while rewarding business class fat cats for whom this €10 travel tax means nothing.

“This Government through its DAA airport monopoly is already strangling tourism and visitor numbers with a €15 departure tax at Dublin Airport. The Government now intends to tax Dublin’s passengers on the double. Any passenger tax should be reflected by a substantial reduction in the DAA’s excessive €15 passenger tax.

“Our greatest concern is the devastation this regressive tax will have on our Shannon base, which we have grown to almost 2 million passengers annually over the past 5 years, but at average fares which are less than €10 during the Winter, this Government is insane if it thinks these price sensitive passengers will pay a tax rate of over 100%. If this tourism tax isn’t changed, there will be tumbleweed rolling down the runway at Shannon Airport next Winter (‘09/’10), but it is nothing more than this Government will deserve for this crazy decision to tax the tourism industry at a time of recession.

“The small revenues which this tourism tax can generate can easily be obtained by reducing spending such as cancelling the absurd waste of PSO subsidies (under which business people are subsidised to the tune of €100 per ticket on unsustainable domestic routes) or closing Failte Ireland which will save more than €150m annually for the Government by scrapping a body that doesn’t deliver one additional visitor into this country.

“It is not unreasonable during the current downturn that each citizen or industry should share a fair burden of pain. However no other industry is being taxed by this Government in the way that the tourism industry is, and no other consumers are being asked to pay a 100% rate of tax, as (in this case) visitors to/from Shannon are. This Government must realise that it can’t tax its way out of a recession. The tourism industry is in recession, visitor numbers are declining and this decline will turn into a collapse next year if this regressive and anti-visitor tax is not cancelled or restructured”.

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