Court hears airlines seeking hundreds of millions from state in air travel tax repayments

Court hears airlines seeking hundreds of millions from state in air travel tax repayments

Ryanair and Aer Lingus are claiming hundreds of millions from the State in repayments of the air travel tax, the High Court has heard.The airlines are also seeking damages over what they saw was the unlawful levying of a variable rate tax between 2009 and 2011.Today, Mr Justice Max Barrett made rulings in relation to the progressing of six cases over the tax which is no longer applied.He said there should be a unitary, rather than modular, trial of the separate cases involving the State, Aer Lingus, Ryanair and Aer Arann.The tax was introduced at a €2 / €10 rate in 2009 before being changed to a flat rate in March 2011 of €3 following an European Commission decision. In April 2014, the rate was reduced to zero.In the cases taken by Ryanair and Aer Lingus, they sought repayment of the allegedly unlawfully paid variable tax for the period in which it was levied and which Mr Justice Barrett said could amount to between €100 and €200m.Ryanair has provided figures to the court saying some 9.8 million flights were subjected to some €86m in air travel tax during the unlawful period, the judge said. Both airlines also seek damages.The Minister for Finance and the State, in their proceedings, sought to recover the unlawful State aid found by the European Commission to have been put in place as a result of the variable rate.By providing a lower rate of €2 for flights of under 300km, as against the €10 for over 300km, this was unlawful State aid, the Commission found. In December, 2016, the European Court of Justice said the amount to be recovered was the difference between the lower and higher tax, that is €8 per passenger.Aer Arann, which was sued by the State parties on its own and in separate proceedings along with Aer Lingus, had come out of examinership in 2010 having got new investment from the Stobart group.It reached a settlement agreement with the State in 2015 in relation to its own proceedings against the State but was still a defendant in the unlawful aid case brought by the State.Among issues in dispute is whether an amended defence to those outstanding proceedings complies with Aer Arann’s obligations under the separate settlement it reached with the State.Ryanair and Aer Lingus sought that there be a modular trial of the cases dealing with liability and quantum of sums involved. Aer Arann said the recovery (of alleged unlawful aid) action against it should be postponed until after Aer Lingus and Ryanair cases seeking damages and restitution of the tax.Mr Justice Barrett said the Aer Arann proposal would involve postponing the decision on the State aid recovery which appear to the court ot be contrary to EU law and could not be allowed.The judge said there would be a unitary trial.He declined an application from the State parties that the airlines provide material and reports on which the repayment of taxes and damages was based.He agreed to applications from Aer Arann for amendments to its defence and counterclaim but rejected its proposal for the sequencing of the trial.The judge said it was unlikely the cases could be heard until later this year or the first half of next year.