3 airlines ask Ireland to ax its passenger tax

updated 11:56 a.m. ET Oct. 14, 2009

DUBLIN - In an unusual act of unity, three competing airlines called Wednesday for Ireland to abandon its euro10 ($15) tax on all departing air passengers because it's hurting traffic volume at a time of deep recession.

The joint statement from the chief executives of Ryanair, Aer Lingus and Cityjet said average passenger numbers leaving Dublin Airport have fallen 15 percent since the introduction of the euro10-per-head tax in April.

They forecast that business at Ireland's main airport would fall this year by 3 million passengers to 21 million, and blamed the tax for inflicting "a devastating impact on traffic and visitor numbers."

The government of Prime Minister Brian Cowen offered no immediate reaction.

Ireland is facing its worst fiscal and economic crisis since the 1930s. The government is drafting an emergency December budget designed to cut euro4 billion ($6 billion) off its soaring deficit through a range of tax increases and spending cuts. It previously has defended its imposition of an air-ticket tax as a necessary part of raising more money from all sectors of the economy.

The airlines counter that taxing air travel just makes matters worse, because it discourages tourists from picking Ireland as a destination and spending money here on hotels, meals and goods. Ireland has a 21.5 percent rate of sales tax.

Ireland is one of just three European countries that adds a tax to departing air tickets, along with the United Kingdom and France. Belgium last year backed off its own plans to add such a fee, and the Dutch dropped theirs earlier this year, after facing industry opposition.

Normally, Aer Lingus and Ryanair are locked in a war of words and rarely speak with one voice on anything. Ryanair already owns 30 percent of Aer Lingus and remains committed to eventually absorbing the struggling, formerly state-owned airline.

Cityjet is a Dublin-based subsidiary of Air France. Its flights link Dublin with London and Paris.

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