The airport travel tax, which was introduced at the end of March, will lead to significant job losses and revenue while only contributing a small sum to State coffers, according to a new report.
The report, which was conducted by aviation experts Amsterdam Aviation Economics on behalf of Aer Lingus, Cityjet and Ryanair, reveals the €10 tax will result in revenue losses of €482 million, up to 3,000 lost jobs and 1.2 million fewer departing passengers, yet will generate just €116 million in tax revenues in the first year following its introduction.
The measure, announced in last October's Budget, imposes a tax of €10 per passenger for those travelling distances of more than 300km. Passengers on domestic flights pay €2 each way for their trips.
The study also warns of further losses to the Government as a result of the departure tax when reduced income tax, increased unemployment benefits, reduced VAT receipts and declining corporate tax are taken into account.
“Our analysis clearly demonstrates that the travel tax in Ireland has resulted in a decline in revenues of a far greater magnitude than the tax likely to be collected. Airlines have had to absorb the tax in lower fares to maintain volumes and, as this will be unsustainable, capacity will further reduce as airlines continue to move aircraft to lower cost markets where no travel tax applies," said Jan Veldhuis of Amsterdam Aviation Economics.
"This will have a further detrimental impact on the Irish economy and the tourism industry. The reduced airline network is impacting on connectivity to Ireland, making it less attractive to visit and to do business in Ireland, which is an impediment to economic recovery”.
The chief executives of Aer Lingus, Cityjet and Ryanair again called on the Irish Government to remove the measure.
A number of other organisations including the Irish Tourist Industry Confederation has also urged the Government to scrap the tax.
