Air duty move 'will save US route'
Tuesday 27 September 2011
A decision to cut Air Passenger Duty in Northern Ireland will save the region's only US airline route, political leaders have said.
This came after the Chancellor confirmed his decision to cut the levy and devolve its control to the Stormont Executive.
The move followed warnings that Northern Ireland's failure to match the lower Air Passenger Duty (APD) rate of the Irish Republic could make long-haul flights from Belfast uneconomical.
The change will come into force on November 1, when APD will fall to the lower short-haul rate - currently £12 per passenger in economy and £24 for business and first-class passengers.
Continental Airlines had said the existing rate added £60 to every US flight from Belfast International Airport and could force the transatlantic route to be axed.
Stormont leaders, First Minister Peter Robinson and acting Deputy First Minister John O'Dowd, welcomed the change in policy.
Mr Robinson said: "The Chancellor's announcement today represents the culmination of months of intense engagement undertaken by the Deputy First Minister and I to prevent the loss of our Continental Airlines service to Newark which would have had a hugely negative effect on our economy and business confidence here.
"HM Treasury as a result have now agreed to immediately reduce the duty for direct long-haul flights from November 1 and to begin the process to devolve APD to the Assembly.
"Reducing APD on direct long-haul flights will ensure that our airports remain competitive."
He added: "We anticipate that we will bring proposals to our Executive colleagues that would further reduce this tax to at least the level in the Republic of Ireland as soon as it is devolved."
Mr O'Dowd said: "Over recent months we have made a concerted effort to ensure that this Continental flight was retained and that APD was devolved.
"As part of this process we have met with Treasury and the Prime Minister, to put forward the case for devolving APD.
"Our campaign has been supported widely by public representatives in the United States and at home and we would very much like to thank them publicly now for their support."
Mr O'Dowd, filling the Deputy First Minister role for Martin McGuinness who is contesting the Irish presidency, said the flights were an important gateway for investors.
Secretary of State Owen Paterson said the move followed close work with Stormont politicians.
"Peter Robinson, Martin McGuinness and their colleagues worked very closely with us," he said.
"This has been a great example of how good teamwork between Whitehall and Stormont can deliver real benefits to Northern Ireland."
The Chancellor said the Government had moved to protect the only direct long-haul service operating from Northern Ireland and the jobs of those who serve the Belfast route.
"Northern Ireland faces a unique challenge in attracting traffic - including very valuable business customers - into its airports," he said.
"By announcing this immediate cut and our intention to devolve aspects of APD, the UK Government is renewing its commitment to stimulating and rebalancing the Northern Ireland economy."
Enterprise Minister Arlene Foster said the Chancellor's announcement was great news for the Northern Ireland economy. Finance Minister Sammy Wilson said the change was "crucial for business and for tourism".
Virgin Atlantic Airways welcomed the move, adding that it hoped the Chancellor would now "cancel the double inflation (APD) increase planned for next spring".
The Airport Operators Association also called for the reduction in the "shockingly high levels of APD in every part of the UK".
And the British Air Transport Association said this "one-off tax cut for transatlantic passengers does nothing to help people travelling between Northern Ireland and the mainland who still face a double APD on all outbound and incoming domestic flights".
A spokeswoman for the International Airline Group - the parent company of British Airways and Spanish carrier Iberia - said: "By cutting APD on flights from Northern Ireland the Chancellor has admitted that this tax is damaging the economy. It is making Britain less and less competitive and we are losing business to our European rivals.
"British business, travellers and tourists have paid the price too long. It's now time to scrap APD not just for Ireland but for the rest of the UK and put UK PLC back on the path to growth."
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