The European Commission has decided that the Irish air travel tax is unfair and has ordered Ireland to recover the advantage from all airlines that have benefited from it.
The main beneficiaries are Ryanair, Aer Lingus and Aer Arann.
In 2009, Ireland introduced an air travel tax for flights departing from Irish airports. The tax was set at €2 for destinations at a maximum of 300km from Dublin and at €10 for all others.
The Commission found that the lower rate favoured flights within Ireland and to nearby parts of the UK, giving the companies concerned an economic advantage over their competitors and thus distorting competition in the internal market.
In two other decisions, the European Commission concluded that financial arrangements between the airport of Tampere Pirkkala in Finland and Ryanair do not constitute state aid in the meaning of EU rules because they are in line with market terms.
The Commission also has found investment aid in favour of the Chania airport in Greece to be in line with EU state aid rules, in particular because it is well-targeted and proportionate to the objective pursued.
Commission Vice-President in charge of competition policy Joaquín Almunia said: "Our ultimate aim is to establish a level playing field for all airlines and airports regardless of their business model, from flag carriers to low-cost airlines. Today's decisions further clarify the application of principles of EU state aid control to the sector. We will look at other cases of state aid to airports and airlines in the coming months, applying a consistent approach."
These decisions are part of over 60 on-going cases in the aviation sector, out of which 34 are in-depth investigations.
