Shannon and the tourist tax

Ryanair today have issued a warning in the strongest possible terms regarding the impact of the travel tax introduced in the budget. Prior to Finance Minister Brian Lenihan's budget on Tuesday, Ryanair had already sounded the first words of warning on the possible effects of such a measure.

The airline has confirmed that that it is seeking an urgent meeting with the Minister for Transport to discuss the impact of the tax on Shannon airport where the average Ryanair fare will more than double. Whilst stating that Ryanair is not opposed to the travel tax in principle - it will effect less than 15% of their passengers - the airline has called for the 

restructuring of the tax.

Among the changes to the tax structure proposed by Ryanair are the alignment of the tax with the total fare paid. They point out that a business class passenger paying a €3,000 transatlantic fare will pay the same €10 tax as a cash strapped leisure traveller on a €10 fare.

Ryanair has also confirmed that they will now enter into discussions with Shannon Airport Authority about the future viability of their 2 million passenger base there. The statement also indicates for the first time the fact that their operation in Shannon makes money in the summer but not the winter.

Whilst CEO Michael O'Leary is a master of hyperbole, his comments today on the future of Shannon are stark even by his standards - 

“Our greatest concern is the devastation this regressive tax will have on our Shannon base, which we have grown to almost 2 million passengers annually over the past 5 years, but at average fares which are less than €10 during the Winter, this Government is insane if it thinks these price sensitive passengers will pay a tax rate of over 100%. If this tourism tax isn’t changed, there will be tumbleweed rolling down the runway at Shannon Airport next Winter (‘09/’10), but it is nothing more than this Government will deserve for this crazy decision to tax the tourism industry at a time of recession."

“The small revenues which this tourism tax can generate can easily be obtained by reducing spending such as cancelling the absurd waste of PSO subsidies (under which business people are subsidised to the tune of €100 per ticket on unsustainable domestic routes) or closing Failte Ireland which will save more than €150m annually for the Government by scrapping a body that doesn’t deliver one additional visitor into this country."

As the Ryanair fleet replacement program continues, aircraft with the smaller titles are becoming fewer, but are fewer Ryanair aircraft going to be seen in Shannon as a result of the Irish government's travel tax ? EI-DAG on approach to Runway 24.