Ruling from EU’s second highest court sees Ryanair win battle over unfair air tax

In the Republic of Ireland’s (ROI) budget in 2009, an air tax was introduced to generate revenue for a cash-stricken country. However the tax was not greeted with open arms as it seemed to create a far from level playing field for airline operators in the country. The initial tax was set at €10.00/passenger departing Ireland on any flight longer than 300km from Dublin Airport, and €2.00/passenger for flights shorter than that. This hit Ryanair particularly hard as the tax was exempt for transit passengers, which made up the bulk of its competitors’ passengers, Aer Lingus and Aer Arann. It also excluded smaller airports and planes carrying under 20 passengers. Ryanair argued that the tax amounted to nothing more than state aid.
On the 1st March 2011 the EU ruled that the dual tax interfered with the internal market, so the tax was changed to a flat rate €3.00 across the board, once again with the exclusion of transit passengers. At the same time in 2011 the European Commission found against Ryanair’s complaint that the tax was state aid for the benefit of Aer Lingus and Aer Arann. Three years later and with a burgeoning economy, the Irish Government scrapped the tax altogether in April 2014.
However this did not stop Ryanair pursuing their complaint that the tax levied was state aid and took their compliant to the second highest court in Europe, the Luxembourg-based General Court who, on Tuesday of this week, found in favour of Ryanair by declaring that the previous ruling of the European Commission had difficulties in its findings and rather than give a ruling, the Commission should have launched a formal investigation instead. The court therefore annulled that part of the European Commission’s decision.