Cancellation of Irish Air Tax: which airlines benefit the most?

The Irish Government announced on Tuesday 15th October that the ‘Airport Travel Tax’, currently €3 per departing passenger, will be cancelled from April 2014. It had been argued by the travel industry that the tax was counterproductive in discouraging tourism to Ireland during the economic recovery.

Ryanair has declared that it will deliver an additional 1M passengers to/from Ireland as a direct result of the Government’s decision.

Our Capstats schedules tool has enabled us to generate a quick view of the airlines which will benefit from the Irish Government's decision. Cost savings will pass through into improved financial performance for the main beneficiaries, Aer Lingus and Ryanair, which between them make up more than 80% of the total tax revenue.

A list of the Top 10 airline beneficiaries is shown below:

AirlineIrish Passengers, m, year to Sep13Tax Saving, €000s
Aer Lingus5.2515,744
British Airways0.29856
Air France0.25763

The removal of this tax makes the cost differential between flights from Dublin and Belfast even more pronounced. Passengers from Belfast will continue to pay UK Air Passenger Duty (APD) at a rate of £13 per departing passenger, with the exception of long-haul routes. It is likely that further political pressure will be applied to remove APD from all Northern Ireland flights through expanding the existing long-haul exemption to include all routes.

by Mark Scourse