TOURISM IS set to receive a double boost in today’s budget through measures aimed at incentivising air travel in 2011.
Minister for Finance Brian Lenihan is expected to reduce the €10 air travel tax in a bid to halt the slide in visitor numbers here.
It is understood the tax could be cut to €2.
This is expected to be followed by the relaunch of a route incentive scheme from the Dublin Airport Authority (DAA) and rebates for airlines on passenger charges, The Irish Timeshas learned.
Government sources say the DAA will incentivise carriers to expand their capacity at Dublin, Cork and Shannon airports next year. The DAA is planning to waive passenger charges once the number of travellers using the three airports hits a certain level.
This is likely to be set at close to the number of passengers projected to travel through Dublin, Cork and Shannon in 2010.
In the case of Dublin, this figure is expected to be about 19 million.
Dublin airport is expected to handle about 18.5 million passengers in 2010. This figure would have been higher had it not been for the disruption caused by the volcanic ash from Iceland earlier this year.
For every passenger that passes through the airports in 2011 above the levels set by the DAA, airlines would receive a rebate in proportion to the level of traffic they put through the terminals.
In addition, airlines will receive incentives to launch new routes. This is likely to involve a 100 per cent discount on passenger charges in year one of the route, reducing each year after that.
Ryanair and Aer Lingus, who account for about 80 per cent of traffic here, would be the main beneficiaries of these schemes.
The DAA launched similar incentives about a year ago but they only covered Dublin airport and they never became effective due to the volcanic ash disruption.
It is not clear if the latest scheme will entice Ryanair to replace some of the capacity it has steadily withdrawn from Ireland over the past two years.
The airline called on the Government yesterday to “axe” the travel tax and “not simply reduce it”.
“It is time this Government tackled this tourism crisis and axed the €10 tax,” Ryanair’s Stephen McNamara said.
The number of visitors to Ireland in the first nine months of this year amounted to 4.6 million, down 16 per cent on the same period of 2009.
The Government hopes these budgetary measures will reverse that decline.
Passenger charges at Dublin airport currently amount to about €18 for each return journey. The DAA could therefore take a multimillion-euro hit on its revenues if the airlines take advantage of its incentives.
The authority however is keen to stimulate passenger growth and boost traffic through its new €600 million Terminal 2.
