Brian O'Shea (Waterford, Labour)
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Question 45: To ask the Minister for Transport if he has received, from the Department of Finance, a copy of the cost benefit analysis of the new €10 air travel tax; if he has undertaken an investigation of the impact of the air travel tax on air passenger numbers and traffic; if so, if he will publish this research; his views on the statement of a person (details supplied) that thousands of aviation jobs may be lost in 2009 and 2010 as a result of the air travel tax; and if he will make a statement on the matter. [28403/09]

Noel Dempsey (Meath West, Fianna Fail)
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The airline industry, along with other industries within the transport sector and beyond, continues to go through a difficult trading period. However, the Government does not accept that the decline in passenger numbers experienced by the airports in the State is due to the introduction of the air travel tax.

The difficult trading period in the airline industry arises primarily from weak world economic activity. The present decline in air travel is an international phenomenon and as a result aviation services are contracting on a global basis. As the Deputy may be aware the Airports Council International Europe, for example, has reported that Europe's airports have posted an average fall of 12.4% in passenger traffic in Q1 2009 compared to the same period last year. The International Air Transport Association reports also reflect such declines.

In the case of Ireland the decline in passenger numbers through our airports is broadly in line with our international counterparts including those airports where there is no travel tax in place. This downward trend has been evident for periods prior to the introduction of the air travel tax. Furthermore, passenger numbers for other modes of transport have also experienced broadly similar declines.

Ireland is not unique in regard to applying a tax on air travel. Other countries within the EU apply similar taxes such as the UK and France, as do Australia and New Zealand. The UK has a relatively high travel tax but traffic there declined by 10% in the first Quarter of 2009, as compared with first quarter of 2008, which is in line with trends internationally arising from the economic downturn. The rates for the Irish air travel tax are not unreasonable both for shorter and longer journeys, when compared to rates in other countries.

The scale of the air travel tax of €10 or €2 arises in the context of a much larger purchasing decision involving travel, hotel expenditures etc, and this serves to limit the impact on tourist numbers. It should also be recognised that tourists are only subject to the tax on their return journey.

Ireland currently faces significant financial challenges and the air travel tax is just one element of the Government's response to those challenges. As regards the taxation of airlines it is worth noting that fuel used by commercial airlines is by international agreement completely exempt from tax, so it's a sector that already has considerable preferential treatment.