Ryanair Cuts UK Flights In Departure Tax Spat

by Jason Gorringe, Tax-News.com, London

02 September 2005

Budget airline, Ryanair on Wednesday announced the withdrawal of 12 flights per week or 100,000 passengers per annum from Newquay airport, following the decision by Cornwall County Council to impose a £5 departure tax on passengers and visitors to the region.

Speaking following the announcement, Michael Cawley, Deputy CEO of Ryanair, explained that:

“Ryanair has always made it very clear to Cornwall County Council that their airport and region is part of a competitive, price sensitive market that must compete with 84 other low fare destinations from London Stansted. Under the right conditions this market is capable of delivering huge economic benefits to the region and in excess of 200,000 passengers per annum."

He continued: “Cornwall County Council’s ridiculous decision to introduce a £5 tax per departing passenger would result in increased revenue of £250,000 for the Council and a reduced income for the region of £10.5m leaving Cornwall worse off to the effect of £10m per annum in terms of expenditure by visitors brought by Ryanair from London."

“With this type of misguided economics is it any wonder that regional tourism in the UK is suffering? The benefits which incoming flights can deliver to regions such as Cornwall are incalculable and far exceed the derisory income, which will be derived by the Council as a result of this tax."

“In the light of the inevitable reduction in demand, which will ensue from this increase in the cost of travel, Ryanair has decided to reduce its schedule to a daily flight and will obviously keep this under review with the possibility of further reductions in the future if demand deteriorates further”.

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