Ryanair has threatened not only to cut its EUR400 million investment in Shannon Airport, but also severely curtail flights from the mid-west after the Government introduced a €10 travel tax in the budget.The air travel tax will affect all passengers departing from Irish airports from March 30th, 2009. The rate will be €10 per passenger on long journeys and €2 for shorter journeys of under 300 kilometres, including most flights within Ireland and to certain UK airports. The tax will not apply to children under two; disabled passengers and their helpers; crew; transit passengers; passengers travelling on aircraft with less than 20 seats and those using small airlines and those servicing Ireland's offshore islands. The travel tax is expected to raise an estimated €95 million in 2009 and €150 million in the full year.
Ryanair said in the current year it expects to carry almost 1.9 million passengers to and from Shannon.
“However, for five months of the year, the average fare paid by these passengers at Shannon is less than €10 per passenger,” a spokesman told the Irish Examiner. “Accordingly, this traffic simply cannot sustain a tax rate of over 100% and if this tax is applied to low fare passengers travelling to and from Shannon, it is inevitable that short-haul traffic there will collapse. We will be seeking an urgent meeting with the minister for transport after the budget to outline concerns about the impact of any such tax on Shannon Airport, which may lead to a substantial reassessment of Ryanair’s €400m investment in Shannon and the continuation of its loss-making operations there.”
Ryanair launched its base at Shannon in May 2005 and, last month, its chief executive Michael O’Leary announced two new routes to Frankfurt and Newcastle that will bring destinations from Shannon to 35 with 26 additional frequencies per week.
