Ireland’s two biggest airlines have been ordered to pay millions to the government, in a legal row over the former travel tax.

The European Court of Justice 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 State to recoup the difference from the airlines – leaving 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, meaning the airlines will have to pay extra travel taxes on behalf of every passenger who benefitted from the lower rate.

In a statement, Ryanair said: “We have been expecting this judgment on Ireland’s illegal Air Travel Tax which now requires Ryanair to pay some €12m 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 €88m of damages we suffered as a result of being forced to pay this illegal tax.”

Aer Lingus has also stated that it has High Court proceedings pending against the Irish Government seeking damages for losses arising from the Air Travel Tax.