Monday 7th March 2011

GOVERNMENT SUPPORT FOR LOW-FARE AIR TRAVEL VITAL FOR IRISH TOURISM

• Financial Incentives Required to Support New Low-Fare Routes, says IHF
• Hoteliers Concerned about Proposed Mechanism for Removing the €3 Travel Tax

Hoteliers today expressed concerns about the proposed mechanism for removing the €3 travel tax under the Programme for Government. Addressing delegates at the 73rd Annual Conference of the Irish Hotels Federation (IHF), Paul Gallagher, President of the IHF, urged the incoming Government to provide greater incentives for new low-fare carriers to operate new routes into Ireland. He stated that the market for short haul flights into Ireland is dominated by Ryanair and Aer Lingus who operate a quasi duopoly and that removal of the €3 travel tax should be part of a wider effort to encourage other low fare airlines (BmiBaby, Easyjet, GermanWings etc ) to launch new routes into Ireland from these markets.

Mr Gallagher called on the Government to make low-fare air travel a central plank of its tourism policy in an effort to reverse the 2.2 million decline in overseas visitors since 2007. He warned that Ireland has become over reliant on Ryanair and Aer Lingus, which between them now account for almost 80 percent of flights into and out of Dublin and are the dominant players across Ireland’s regional airports.

“Given the enormous strategic importance of tourism to the economy, it is not tenable to depend so heavily on two carriers whose business interests may not always be aligned with those of the Irish economy. We need to encourage other low fare carriers into Ireland from our key markets of France, Germany and Great Britain.”

                “We’re calling on the Government to act swiftly to provide financial incentives to alternate low-fare operators such as Bmibaby, EasyJet, Germanwings, Transavia, Flybe, Jet2 and Wizz Air and to support new routes with targeted marketing campaigns in our key markets such as the UK, Germany and France. So that existing routes can operate on a more competitive basis, we’re calling on the Government to work more closely with airports to reduce charges.”

The IHF states that, in order to encourage greater competition on new and existing short haul routes, the Government must put safeguards in place to restrict anticompetitive behaviour that could make Ireland less attractive to new entrants. Failure to achieve a sustainable business environment for low-fare airlines in the past has contributed to a catastrophic drop in visitor numbers as price-conscious holidaymakers across Europe look elsewhere when holidaying abroad.

“We believe Ireland can punch above its weight in attracting a greater share of overseas visitors provided we have the right marketing strategy in place supported by low-fare access and a competitively priced product,” states  Mr Gallagher. “For our part, hotels and guesthouses have dropped their prices significantly since 2007 resulting in tremendous value for holidaymakers. The key challenge now is to ensure we utilise our national tourism infrastructure more effectively – including our airports – to restore Ireland’s position as a key tourist destination, allowing tourism to play a significant role in Ireland’s economic recovery.”

The need for greater diversification was evident last week when Ryanair sought to use its dominant market position to demand payments from DAA to deliver passengers into Shannon airport.
               

FOR INFORMATION:
Eoin Quinn / Siobhan Molloy                       Tel: 01 6760168
Weber Shandwick                                           Mobile: 087 233 2191 / 086 817 5066