Air transport: invitation to submit comments over State aid granted to the Dublin Airport Authority and Aer Lingus

On 17 June 2016, the invitation to submit comments pursuant to Article 108, paragraph 2, of the Treaty on the Functioning of the European Union (TFEU), over the Ireland’s exemption from the payment of the air passenger tax, was published on the Official Journal of the European Union. Interested parties may submit their comments by 17 July 2016.

On 30 March 2009, the Irish authorities introduced an excise duty on air passenger transport to be imposed in respect of “every departure of a passenger on an aircraft from an airport” (“Air Travel Tax”). Although the tax is levied by passengers via the ticket price, airline operators are liable to collect and pay it in respect of passengers departing on their respective aircraft. In this context, transfer and transit passengers do not fall within the definition of “passenger”, and are therefore exempted from the payment of the tax (the “exemption concerned”).

According to a complaint sent to the Commission, the exemption concerned would deem to be an illegal and incompatible State aid, estimated at a value of at least EUR 8.6 million per year, granted in particular to Dublin Airport Authority and to Aer Lingus, which operates a high proportion of flights carrying transfer and transit passengers.

The Irish authorities have argued that the exemption concerned is intended to ensure the clarity of the application and to avoid over-application, so as not to penalize a person if he or she had to stopover in an airport that was not their final destination and such a stopover was required in order to get to the final destination or the airline journey to a final destination included a stopover. According to information provided by those authorities, the first leg of a trip with a stopover in Ireland is exempted from the tax. The Irish authorities have informed the Commission that they are open to an eventual amendment to their tax legislation in order to abolish the “single-booking” condition.

The Commission has considered that the exemption concerned seems to constitute State aid which raises doubts as to the compatibility with the internal market. Consequently, with a letter of 28 September 2015, the Commission notified Ireland of its decision to initiate the procedure laid down in Article 108, paragraph 2, TFEU in respect of the State aid measure in question.