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 this month.
Transport minister Leo Varadkar told the Capa (Centre for Aviation) Airlines in Transition conference near Dublin: “Air Passenger Duty in Britain is very high and we saw it potentially added to our advantage.
“We could have more 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, who is due to address the World Travel and Tourism Council Summit on Friday 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 explained: “When Ireland’s 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.”
Varadkar said the government had replaced the tax with 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 to encourage aviation, not impede it.”