Wednesday 18 September 2019

Ryanair and Aer Lingus told to pay €16m to Government in 'illegal state aid' ruling

John Mulligan

John Mulligan

Ryanair and Aer Lingus have been ordered to pay the Government what is expected to be a total of about €16m, after the European Court of Justice said the two airlines benefited from illegal State aid of that amount.

The European Commission previously ruled that the way Ireland's now suspended air travel tax was structured meant shorter air routes had effectively benefited from illegal State aid.

It wants Ryanair to pay the Government €12m in air taxes, and Aer Lingus to pay €4m.

Of the Aer Lingus total, it's thought that about €1m is attributable to Aer Arann, as it operated Aer Lingus Regional services.

Aer Arann, now Stobart Air, was also thought to have a separate liability, but the issue is complicated by the fact that the carrier went into examinership after the travel tax was introduced. Stobart Air continues to operate Aer Lingus Regional services.

Last year, the European General Court overturned the Commission's ruling.

But the European Court of Justice said yesterday that the airlines must pay back the money and reversed the General Court's decision.

The Government introduced the air travel tax in 2009. It levied a €2 charge per passenger on flights up to 300km from Dublin, and €10 for distances over that. They were later replaced with a flat €3 rate.

The Commission told the Government it would have to collect from both Aer Lingus and Ryanair, the difference between the two rates - €8 - that had previously been in operation, in respect of each passenger that had been charged the lower €2 levy between 2009 and 2011.

Irish Independent

Also in Business