EU say Irish air travel tax is unfair
The EU Commission has ruled that the Irish air travel tax is unfair and has ordered Ireland to recover the advantage from all airlines that had benefited from it.
The main beneficiaries are Ryanair, Aer Lingus and Aer Arann.
In 2009, Ireland introduced an air travel tax for flights departing from Irish airports. The tax was set at E2 for destinations at maximum 300 km from Dublin and at E10 for all others.
The Commission found that the lower rate favoured flights within Ireland and to nearby parts of the UK, giving the companies concerned an economic advantage over their competitors. In a separate conclusion, the Commission found that the financial arrangements between the airport of Tampere Pirkkala (Southern Finland) and Irish no-frills airline Ryanair do not constitute state aid in the meaning of EU rules. They are therefore perfectly legal, thus closing an investigation that was opened in 2007 following a complaint by a competitor airline. As per an arrangement concluded with Ryanair, the airline pays an 'all inclusive' charge differing from the terms offered to other airlines at the airport. The Commission's investigation found that this agreement respected market terms as it was concluded on terms that a private investor operating under market conditions would have accepted. "The agreements are based on an ex ante business plan showing profitability expectations and therefore confer no economic advantage to Ryanair. The business results of the airport further confirm these expectations," said the Commission.
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