11 April 2014 at 08.13 GMT
Ireland scrapped its air travel tax in order to take advantage of high rates of Air Passenger Duty (APD) in the UK, the Irish transport minister revealed yesterday.
Transport minister Leo Varadkar told the Capa (Centre for Aviation) Airlines in Transition conference outside Dublin: “APD in Britain is very high and we saw it potentially added to our advantage.
“We could have people fly through our hubs if air tax was zero.”Varadkar said: “We intend Ireland to have the most-favourable tax regime for aviation.”
The minister explained: “When the Irish economy got into trouble [in 2008] the previous government did what governments do and said ‘Let’s tax the tourists’.
“We took the view this was a mistake and that we would abolish the tax, but we wanted the airlines involved.”
He added: “We watched what happened in other countries.
“When the air tax was €10 per passenger there was evidence it affected the low-cost airlines in particular. We reduced it to €3 and from April 1 it was reduced to zero, although it remains in place.
“About 20 new routes have started as a consequence and there have also been increases in capacity. Nine new routes started from Shannon this week and Ryanair has expanded its winter schedule.”
Varadkar said the government had abolished the tax and replaced it with tax incentives for aviation. He said: “We intend to encourage aviation by taking a very liberal view.”
Irish Aviation Authority chief executive Eamonn Brennan told the conference: “Traffic fell off a cliff at Dublin [after 2008]. Now it is government policy in Ireland to encourage aviation, not impede it.”
Ireland’s transport minister is also the country’s minister of tourism and sport and, unlike UK tourism minister Helen Grant, has a place in the government’s cabinet.
Varadkar said: “Transport and tourism work particularly well together.”
Sourced from Travel Weekly