Ryanair is reportedly prepared to take the Irish government to court after a ruling found that it is partly liable to pay millions in a legal row over the former travel tax.
The European Court of Justice (ECJ) previously ruled that the travel tax was discriminatory, because passengers from Dublin paid a lower rate than those from other airports.
But it also told the Irish government to recoup the difference from the airlines.
This leaves Ryanair and Aer Lingus to pay €8 for every passenger who benefited from the lower rate.
The court has now rejected an appeal from the European Commission.
The ECJ said: “The advantage in question did not consist in the fact that those airlines were able to offer more competitive prices than their competitors.
“It resulted quite simply from the fact that those companies had to pay a lower amount than they would have had to pay if their flights had been subject to the standard rate.”
The airlines have to pay extra travel taxes on behalf of every passenger they carried from Dublin while the tax was in operation.
The Irish Air Travel Tax was applied to passenger departures from March 30, 2009 until March 31, 2014.
Up to February 2011, a rate of €2 was applied where the flight was to a destination no more than 300km from Dublin airport.
This covered all flights within Ireland and flights to the UK. A rate of €10 applied to flights to any other destination.
Ryanair said: “We have been expecting this judgment on Ireland’s illegal Air Travel Tax which now requires Ryanair to pay some €12 million to the Irish government on behalf of passengers who paid the lower €2 tax rate on shorter routes, despite the fact that we did not collect the €10 tax from these passengers.
“This ruling now clears the way for Ryanair and other airlines to pursue our High Court action against the Irish government to recover the €88 million of damages we suffered as a result of being forced to pay this illegal tax.”
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