ECJ Finds Ryanair, Aer Lingus Received State Aid
The European Court of Justice (ECJ) decided on Wednesday to reject an appeal on behalf of Aer Lingus, Ryanair, and the Irish State. The ECJ found that the airlines received state aid in the form of reduced air travel tax, and ordered that the amount of aid received must be paid back to the state, initially suggested at a rate of eight euro per affected passenger.
Writing in the Irish Times, Joe Brennand and Charlie Taylor said that this may amount to a €16 million tax bill for the airlines, €4 million for Aer Lingus, and €12 for Ryanair.
Air Travel Tax applied to departures of passengers on flights from Irish airports, but was discontinued in 2014. The tax was applied at a rate of two euro for flights less than 300 kilometers from Dublin Airport, but at a rate of €10 to other destinations. This was seen as penalising airlines that mainly did long-haul flights from other countries, while helping airlines like Aer Lingus and Ryanair who provide a large amount of flights to the UK.
However, while initially ordered to pay at a rate of eight eurp per passenger, the ECJ noted that, “as it was possible for the economic advantage obtained from the application of the lower rate of ATT to be passed on, be it only in part, to passengers, the Commission was not justified in taking the view that the advantage enjoyed by the airlines concerned was automatically, in all cases, EUR 8 per passenger.”