Olivia Mitchell (Dublin South, Fine Gael)
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Question 275: To ask the Minister for Transport his view on the statement of the Minister for Finance that the new air travel tax should have little, if any, impact on aviation policy; and if he will make a statement on same and on Aer Lingus assertion that it will cost them an additional €30 million in 2009. [46526/08]

Noel Dempsey (Meath West, Fianna Fail)
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Ireland's aviation policy, as set out in my Department's current Statement of Strategy is to promote regular, safe, cost effective and competitive air services linking the country and key business and tourism markets. The priority, from an Irish economy perspective, is to maintain the highest possible levels of connectivity between Ireland and key markets around the world.

The Air Travel Tax announced in Budget 2009 will come into force in respect of passengers departing from Irish airports on and from 30 March 2009. The decision to introduce the new tax was taken in the context of the overarching priority to reduce the budgetary deficit.

Ireland is not unique in regard to applying a tax on air travel. I understand a number of countries within the EU apply similar taxes including, the UK, France and the Netherlands, as do Australia and New Zealand. The proposed rates for the Irish air travel tax at €10 and €2 are not unreasonable when compared to rates in other countries.

I understand that tourists will only be subject to the tax on their return journey and, on this basis, it is envisaged that the additional €10 or €2 in the context of a much larger purchasing decision involving travel, hotel expenditures etc. should not have much of an effect on tourist numbers.

I appreciate the airline industry continues to go through a difficult period reflecting in the main weak world economic activity. However, this is somewhat offset by the recent fall in oil prices. Oil prices which have now more than halved from the all-time high prices experienced earlier in the year. Moreover, fuel used by commercial airlines is completely exempt from tax so it is a sector that already has considerable preferential treatment.

The cost implications for airlines arising from the air travel tax would be a commercial matter for each airline concerned. It is open to the airlines to decide whether or not they wish to pass the tax on in full to their customers.