Abolition of duty will bring vital investment boost, say leading firms
Northern Ireland’s business leaders have hailed the proposed abolition of aviation tax as a boost to help rejuvenate the economy.
Industry chiefs also said the removal of the crippling air passenger duty (APD) at its current level will help attract foreign investment which is crucial to Ulster.
Their comments come ahead of Chancellor George Osborne’s announcement that the levy is to be axed — or substantially reduced — in order to save our only direct air link with America.
Francis Martin, president of Northern Ireland’s Chamber of Commerce, said Mr Osborne had made the right decision following a letter sent by top business figures pleading for urgent action.
“The transatlantic route between Belfast and North America is crucial for our economic growth,” Mr Martin said.
“The significance of this particular issue was demonstrated by the number of businesses who signed the recent letter to the Chancellor seeking his intervention.
“George Osborne has shown himself to be willing to take bold decisions in the interests of contributing to the economic well-being of our region.”
Seven months ago the Belfast Telegraph warned that the future of the Belfast to New York (Newark) route, operated by Continental Airlines, was in jeopardy because of APD.
The daily service, which is worth around £20m a year to the local economy, was being
threatened by a tax hike imposed last November.
It adds £60 to an economy fare and £120 to a business ticket for US-bound passengers, whereas the charge from Dublin is a mere €3.
Continental Airlines flies from both airports and bosses said the airline was subsidising the tax cost in Belfast.
The company recently told MPs that this would cost it £3.2m this year, making the route no longer viable.
It is understood that Continental was about to call time on the route from January 2012 |unless a decision was made swiftly.
Last week Northern Ireland’s business elite took the unusual step of writing to the Chancellor to outline their fears over APD.
Flagship companies Bombardier Aerospace Belfast and bus manufacturer Wrightbus were among the 23 signatories.