Airport chief slams Executive over air tax

Northern Ireland risks missing the boat as airlines receiving new aircraft plan routes for next year, Graham Keddie added.

He said ministers could pick up the bill for Air Passenger Duty (APD) to compete with Dublin’s tax free status, which has prompted enormous growth south of the border based on low fares.

“We are pointing business across to a foreign country.

“Our devolved central government is abdicating responsibility to deal with this.”

He said worry about the block grant impeded any real development.

Last week Ryanair announced plans to fly from Belfast to London Gatwick from March but said new European routes were uncertain while most of their profits were eaten up by tax.

Cuts to APD in Northern Ireland separately from the rest of the UK would see Treasury reducing the amount it provides Stormont to run public services.

Mr Keddie said: “The Northern Ireland Executive are, to put it in colloquial terms, bottling it.”

Airline chiefs gave evidence on APD to the Northern Ireland Affairs Committee at Westminster.

Stormont’s Department of Enterprise, Trade and Investment (Deti) has already cited an assessment which found that reducing APD was not a strong tool for promoting economic development, unlike corporation tax. It is working to develop an air route development fund.

Despite overwhelming corporate support, the Executive has come under fire from trade unionists favouring more public spending for agreeing to cut the business levy.

Independent committee member Lady Sylvia Hermon, (NDown) said it was odd that Northern Ireland was prepared to take a huge cut in the block grant to accommodate corporation tax but not accept a smaller reduction for APD.

Mr Keddie said: “We are an island beyond an island, we need air transportation. It is not a luxury, it is crucial to our development.”

He approached the Executive with Ryanair for additional support months ago. He said they also asked ministers for £200,000 to entice an airline to operate to Munich in Bavaria but that did not proceed.

George Best Belfast City Airport chief executive Brian Ambrose said the airport could deliver 10 European routes over time with more favourable tax treatment.

The DUP’s Gavin Robinson, (EBelfast), said Jet2.com had begun operating from Belfast to Italy in spite of APD.

“There are clearly other factors at play irrespective of what APD is charged.”

A DETI spokeswoman said an expert assessment found that any reduction in short-haul APD would result in increased passenger numbers using Northern Ireland’s airports.

However, the assessment also identified that, when the cost to the public finances in Northern Ireland is taken into consideration, APD is not considered to be a strong economic development tool.

“The tax is imposed and set by the UK Government and therefore Northern Ireland ministers have stated that the onus must be on HM Treasury to deal with APD at a national level.

“Air connectivity is an important driver for economic growth and the Department of Enterprise, Trade and Investment (which includes Invest NI and sponsorship of Tourism Ireland) is in ongoing contact with Northern Ireland’s airports and airlines to discuss route development opportunities.