Responding to Government statements that it is considering increasing fares or reducing services on public transport to meet a declared €250m “funding gap” for Public Service Obligations [PSO], an environmental charity has asked Minister Daragh O’Brien to reinstate the €10 tax on airline tickets imposed by Minister for Transport Noel Dempsey in 2009 but cancelled by his successor Leo Varadkar in 2014.
The PSO imposes an obligation on the Government to shore up routes that might not be commercially successful but are nonetheless considered essential, especially in rural areas, including services such as Bus Éireann, Dublin Bus, and Luas services.
Specifically, the PSO funding supports BusConnects and the ‘Connecting Ireland Rural Mobility plan’, which introduced over 170 new or enhanced services since 2022. Over 240 towns and villages have been connected to the public transport network, providing connections to 61 Healthcare facilities, 41 Higher education facilities, and 71 rail services. PSOs support the Young Adult Card and the 90-minute fare free child fares inclusion of those aged 5 to 8-years old,Transport for Ireland reported an “all-time high” usage of PSO public transport with a total of 343m journeys across 2024.
However. Minister Daragh O’Brien has acknowledged it is not ‘fiscally responsible’ to maintain a deficit in the PSO budget where €250m in funding is required to plug the gap, requiring a new ‘sustainable funding model’. The Department recently stated that these funds could only be obtained by increasing public transport fares, cutting public transport services or taking €250m a year away from National Development Plan infrastructure projects.
According to FIE the funds raised by reinstituting the Air Travel tax would be over €400m, well in excess of the declared ‘funding gap’ and would provide the required ‘sustainable funding model’.
‘Ireland has been very successful in the last 5 years in improving public transport, especially in the expansion of rural bus services and the reduction of fares. Within the EU we have stood out as the most rapidly improving. But in not taxing airline travel at all, we are well out of line with our partners.’
‘The UK imposes a €15 Air Passenger Duty (APD) for short-haul economy fares, rising with flights over 2,000 miles paying €90 in economy class and €216 in for Premium Class with private jets paying €647. Germany, Austria, and the Netherlands maintain airport taxes ranging from €29 to €42 per passenger, while the USA Passenger Facility Charge (PFC) averages close to €37.
‘The tax-free status of aviation is a wealth transfer from the less well-off to the better-off. Restoring the Air Travel Tax would also be a step towards climate justice’, Mr. Lowes said.
Minister O’Brien has told the organisation that the issue is one for the Minister for Finance, who has acknowledged the request.