Martin Mansergh (Tipperary South, Fianna Fail)

The recent spate of failures in the airline sector were the result of the sizable spike in oil prices. Price pressures are now subsiding and fuel costs, which had increased to as much as 50% of some airlines' cost base, are falling dramatically. Airlines benefit from an international tax exemption on jet fuel. The extent of this benefit is illustrated by the fact that tax as a percentage of the price of litre of petrol is up to 60%.

The new tax is estimated to yield some €95 million in 2009 and €150 million in a full year. In the context of the difficult fiscal position the Government now faces, this measure is necessary, not unreasonable and fully justifiable.

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