Tuesday 15th February 2005

HOTELIERS CALL FOR STRONG OPPOSITION TO EU JET FUEL TAX

The Irish Hotels Federation (IHF) today voiced its serious concern on the proposed introduction of an EU tax on jet fuel which, if approved, would harshly affect future air access potential and in turn Ireland’s tourism success. The IHF is today calling on the Minister for Finance, Brian Cowen T.D. to take a strong stance against this proposed tax at EU level, which could undermine the successful growth of Ireland’s air access routes. The IHF stated that Ireland is unique within the EU for its island status with a sole reliance on air and sea for inward and outward access. Any national or EU policy that undermines or impacts on transport costs, such as this suggested jet fuel tax, could have knock-on effects on passenger numbers and in turn frequency of flights. According to the Federation, the availability of low-cost air access to Ireland has been by far the principal growth driver to attracting increased levels of visitors to Ireland in recent years. This tax, if introduced, would be entirely contrary to measures being adopted to further grow the tourism sector over the coming years.

The tourism industry is Ireland’s largest indigenous sector, employing some 150,000 people and generating revenues of over €5 billion in 2004. With no land access to Ireland, the growing abundance of low-cost airlines has played a major role in increasing Ireland’s popularity as a destination for holidaymakers. In 2004 6.4 million overseas visitors travelled to Ireland, an estimated 75% of which arrived here by air, a crucial part of our tourism infrastructure.

According to Richard Bourke, President, IHF, the Irish Government must be seen to raise the concerns of the tourism industry on this issue in Europe, otherwise this detrimental tax will simply slip through unnoticed by the vast majority of EU citizens.

“Imposing a tax on jet fuel within the EU would be seriously detrimental to Ireland’s tourism industry. The extra cost burden on airlines would no doubt be passed onto consumers, in turn curtailing the number of trips being taken throughout Europe. Low cost airlines would certainly be worst affected by any such tax. Indeed it’s very concerning to see that there is some kind of hidden EU agenda at play here, aiming to curtail the success of those carriers.”

“Ireland must take a strong stance on this issue given our unique peripheral location and island status. Our industry is urging the Minister for Finance, Brian Cowen T.D. to immediately take steps to voice its concerns on this issue in Europe, and to make clear Ireland’s island position and the detrimental impact of any such measure on air access. The recent growth targets outlined by the Tourism Policy Review Group and the Minister for Arts, Sport and Tourism, John O’Donoghue T.D. to increase visitors to Ireland to 10 million by 2012 are highly dependent on air access to Ireland being increased. Any measure which would negatively impact on or inhibit air access to Ireland runs entirely contrary to those objectives and cannot be supported,” he continues.

“The fact that the monies raised from the proposed tax would be channelled into development aid is not the issue here. We are supportive of measures to assist these policies but we believe that this is not the correct tax in this instance. Other measures must be considered if we are to safeguard Ireland’s tourism sector,” Mr Bourke concludes.

ENDS

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