Brussels, 25/11/2015 (Agence Europe) - In taking the view in 2011 that the Irish air travel tax (ATT) did not constitute state aid, the European Commission was wrong, as it did not open a formal examination procedure when several points indicated that it should have done, the General Court of the EU ruled on Tuesday 25 November in case T-512/11.
The ATT is levied on all airlines that carry passengers from an Irish airport. The rate in force was set initially on the basis of the distance between the departure airport and the arrival airport but was later altered to a single rate of €3 per passenger. Companies are not required to pay the tax for passengers transfer and transit passengers. Ryanair lodged a complaint with the Commission, arguing that the non-application of the ATT to transfer and transit passengers was illegal state aid for the benefit of the airlines Aer Lingus and Aer Arann, as they had a relatively high proportion of such passengers and flights. Ryanair also argued that the flat-rate amount of the tax accounted for a higher proportion of the ticket price for low-cost carriers than for traditional airlines.
The Commission conducted a preliminary examination and concluded that the exemption did not constitute state aid as the measure was not selective. Ryanair challenged this decision in the General Court. Today, the European judges found in its favour. They note that the Commission should have had serious concerns as to the measure's compatibility with the internal market. They say that the preliminary investigation phase was unusually long, lasting almost two years. Such an excessively long period is indicative that the Commission encountered difficulties in its examination, something that should have caused it to open a formal examination procedure. In addition, the Commission examination was incomplete and insufficient, the Court states. (JK)