Forgotten air travel tax still a live issue in courts

Since the Government axed it last year, the air travel tax seems like a distant memory, while the extra routes and passengers to which the move seems to have given birth mean the levy is unlikely to be resurrected any time soon.

However, the charge is still at centre of a number of intertwined court cases involving three airlines, the Government and European Commission, that look likely to take a long time to untangle.

One of them, a Ryanair challenge to a ruling by Brussels officials that the tax was not illegal state aid, is due for mention in the European Court of Justice next week.

While the EU’s press machine flagged the hearing yesterday, it is not thought that the hearing will result in a ruling.

The most significant point about it is that it signals that the litigation surrounding the once-controversial tax is ongoing.

Ryanair argued that the tax, introduced in 2009, was a selective subsidy to rivals Aer Lingus and Aer Arann – now Stobart Air.

When first levied, it charged €2 for passengers travelling to destinations within 300km of Dublin and €10 for those on longer trips. Transfer and transit passengers were exempt.

Ryanair argued that the charge favoured companies with large numbers of domestic, transfer and transit passengers, hence its claim that it was a selective subsidy.

The commission found the lower rate was illegal state aid, but ruled that the exemption for transfer and transit passengers was not.

Ryanair is challenging this element of the finding.

Following the original ruling, the Government introduced a flat €3 rate for all departing passengers, and, on Brussels’s orders, began pursuing all airlines that benefited for the difference between the €2 and €10 per passenger charge, a total of €19 million.

However, the airlines are counter-claiming from the Government, meaning a series of suits is looming in the Republic's High Court and Europe. Despite the complex background it is easy to see who will emerge eventual winners: the lawyers.