Joe Carey (Clare, Fine Gael)

I thank you, a Cheann Comhairle, for allowing me to raise this important issue.

The hospitality industry is in free-fall, with hotels closing and jobs being lost. The Government, however, has done nothing to stem the tide. In fact, the Minister for Finance's travel tax will make this horrendous situation even worse. If the travel tax goes ahead as planned, Ryanair has warned that it will reduce flights to and from Shannon from 30 March. Last year Ryanair accounted for 60% of all traffic through Shannon airport, carrying 1.9 million passengers to and from 30 different destinations. In recent weeks Ryanair has said it will have no choice but to reduce its Shannon-based aircraft from six to four this summer. It will also reduce from 30 to 25 its route network at Shannon. Ryanair's weekly Shannon service will be reduced from 136 flights to 116. These cuts will mean a reduction of 700,000 passengers using Shannon airport this year. The mid-west region, including County Clare, can ill afford this loss.

I spoke with Ryanair's chief executive, Michael O'Leary, two weeks ago and he informed me that his company would reverse its decision on these cuts if the Government scrapped the flat €10 travel tax. The average price of a Ryanair flight is €10 during the winter months and, in effect, the Minister is imposing a 100% travel tax on Ryanair passengers. There is no fairness or equity in this tax, which must be either scrapped or introduced as a scaled percentage on the price of the flight ticket. It is simply not right or fair to charge a passenger travelling to America the same tax as one travelling to London.

Earlier today the Minister for Finance announced that airports in this State which had less than 50,000 departing passengers in the previous calendar year will be exempt from the travel tax. This is positive news for airports in Donegal and Sligo. The Minister's statement, posted on his Department's website, states:

Concerns have been raised regarding the impact the air travel tax could have on small peripheral airports and their ability to develop new routes. The importance of such airports to the local area has also been stressed. I indicated that I would take the matter into account and reflect on it.

Shannon airport is the key economic driver of the mid-west region. We too have major concerns about the flat €10 travel tax, as it will have a devastating impact on our economy. The travel tax has placed in jeopardy Ryanair's €400 million investment in Shannon airport. Some 100 direct jobs and 700 indirect jobs will be lost at the end of March. The lost revenue from 700,000 fewer passengers will place further pressure on retailers in County Clare who are already reeling from the effects of the recession. The tourism industry is being thrown to the wolves by this tax. On a practical basis, it will mean fewer bed nights, fewer coaches, fewer taxi fares and fewer meals in restaurants.

I plead with the Minister to reflect on this damaging tax, as he has done for other airports. He should consider the immediate dire consequences the tax will have on the mid-west region, including Shannon airport. Let the Government put balanced regional development first. The Minister should either scrap this tax for Shannon airport or introduce a fair tax based on a percentage of the cost of flight tickets. The Minister should not lose sight of the fact that we are an island nation.

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