MPs urged to axe aviation tax or see terminal decline
Published 22/06/2011 | 04:33
The survival of George Best Belfast City Airport is threatened by massive hikes in aviation tax, a Westminster committee has been told.
Brian Ambrose, chief executive of the airport, also revealed both the City and International airports have lost one million passengers over the past three years, and he urged the |Executive to press for the immediate abolition of Air Passenger Duty (APD).
He was speaking at a meeting of the Northern Ireland Affairs Committee (NIAC), which is looking at ways of resolving the contentious tax issue.
APD has already been threatening key routes including — as this newspaper revealed in February — the Continental service from Belfast International Airport to New York (Newark), Northern Ireland's only transatlantic route.
As part of its inquiry, NIAC will consider how the levy, which was significantly increased last year, affects passengers, airlines, airports and tourism.
Northern Ireland's airports have been losing significant business to the Republic, whose own aviation tax is comparatively negligible and will soon be abolished altogether.
Mr Ambrose told members that passenger numbers into both Belfast airports had doubled from four to eight million between 1997 and 2007.
But he added that number has fallen by one million over the last three years, and that the punitive APD charges were partly to blame.
With £24 worth of taxes levied on a domestic flight between Belfast and other UK airports, Mr Ambrose said it was a “pretty material” concern for customers.
“Removing APD is the only stimulus that would have an impact,” he said.
Calling for a zero tax rate, he said it was critical for Government to take a “bold step” towards redressing Northern Ireland’s economy.
And he called for urgent action, pointing to the withdrawal of Ryanair from the City Airport last November — which carried 900,000 passengers.
story so farIn February there were fears over Continental’s Belfast-New York service after Dublin slashed its air tax from €10 to €3. That compares with charges of at least £60 per passenger on flights from Belfast.
Emergency talks took place in April between the airline, airport and Stormont ministers and the route was saved pending attempts to resolve APD.
Belfast International Airport
Northern Ireland’s largest airport has been calling for the Stormont Executive to have the power to set its own aviation tax for some time.
Air Passenger Duty (APD) puts the airport at a serious economic disadvantage, particularly as regards our only transatlantic flight to New York, operated by Continental Airlines. The Republic has 18 international routes.
Indeed, the airport’s managing director, John Doran, blamed the “fairly steep ramp-up of rates” on APD for a 3% fall in passenger numbers (or 100,000 people).
He also said APD had been a “significant disincentive” for air carriers wishing to expand or enter the local market.
“We have been in discussion with other carriers, both in the north American context and also looking eastwards to Dubai, Australia and New Zealand, and the one issue that keeps coming up is APD,” he said.
George Best Belfast City Airport
Aviation tax rates are just as problematic for Northern Ireland's domestic flights as they are for international destinations.
That was the message from George Best Belfast City Airport boss Brian Ambrose who said the debate must not focus on one single route.
Mr Ambrose said Air Passenger Duty (APD) should be abolished on all flights from Ulster to help the economy recover. And he said the main issue for both airports should be getting back the million passengers they have lost over the last three years.
When low-cost carriers were operating successfully, Mr Ambrose said the average cost of a return flight was £40.
“They created a scenario when you could buy a pair of jeans or go to Glasgow for the weekend,” he said.
“But APD of £24 can become 50% of the value of that ticket so you’ve lost that stimulus.”
Mr Ambrose said the current government policy on APD is working against both the local economy and tourism.