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Ryanair boss O’Leary says Travel Tax is Destroying Tourism

Ryanair Logo & Plane TailsRyanair chief executive Michael O’Leary claims that Ireland is losing huge growth in passenger numbers, which would be delivered by the carrier, due to the €3 travel tax, as well as high airport costs. This followed transport minister Leo Varadkar announcing that the government decided the €3 tax will remain in place for now, as there is no solid commitment from airlines to deliver more passengers to the country via new routes to make up for scrapping the tax.

O’Leary said at a Dublin press conference that Ryanair serviced 8 million passengers last month, which is more than any other European carrier. The new government vowed to change and reform previous government policies relating to the tax, but hasn’t. He went on to claim that Dublin Airport has increased its costs by 40% as passenger numbers have declined, which can’t be blamed on the recession since passenger numbers throughout the rest of Europe are returning to normal.

The Ryanair chief also said that there is no evidence that Irish tourism has grown, and that claims stating there has been a rise in visitor numbers this year are wrong. He cited Central Statistics Office (CSO) numbers showing that total passenger numbers during the first quarter were down. The airline boss also rejected claims by Varadkar that new routes in exchange for scrapping the tax involved Mediterranean destinations, which accounted for only 25% of the new routes. It’s absurd to dismiss outward bound flights, which are an essential part of air travel, with planes filled on inbound and outbound journeys.

O’Leary added that the travel tax is doing untold damage in the north of Ireland. There shouldn’t be a tax for people who visit the island – north or south. He also presented a detailed strategy to build passenger numbers, noting that the tax will only bring in around €30 million this year and needs to be abolished. (Ryanair is said to have offered to add 5 million more passengers a year to Ireland’s tourist numbers; however, it wanted landing and passenger charges to be scrapped for 5 years.) He also noted that he is willing to spend the next year working with Varadkar on the issue, but he deems the Department of Transport unfit for purpose. The department had reviewed plans put forward by carriers for increasing passenger numbers into the country, but deemed none of them feasible.

Scrapping the travel tax is only one of several proposals announced by the Irish government in May as it attempts to attract more tourism. It has cut VAT on hotels, restaurants, sports fixtures, theatres, cinemas and other attractions from 13.5% to 9%. The change has been in effect since July 1 and will remain until December 2013. There have also been calls for the travel tax to be cut in Northern Ireland, which came after Continental Airlines said it may be forced to withdraw operations from the country due to the fee. The carrier operates between New Jersey and Belfast.

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