Air tax double whammy ...not only is it set to soar, we could end up paying it twice
Published 03/06/2011 | 01:06
Air travellers here are being unfairly penalised under current tax rules, according to a leading watchdog.
The Consumer Council said Air Passenger Duty (APD) must be axed in Northern Ireland because we rely so heavily on UK flight connections - meaning we can end up paying the tax twice.
There is the option of flying from Dublin, which is eliminating APD, making it much cheaper to fly from the Republic.
The warning comes just one month after Northern Ireland's only transatlantic air route - which is worth around £20m to the local economy - was given an 11th-hour reprieve.
The popular Continental service from Belfast to New York (Newark) had been threatened by the huge increase in APD, which made the cost of a journey £60 more expensive than the US carrier's Dublin service to the same destination.
Stormont ministers ultimately intervened to save it, but now the Consumer Council has warned that domestic flights could also be in jeopardy if plans for a hike in the current levy go ahead. The cost of domestic flight tax for business class customers, for example, would rise from £24 to £32.
The additional cost could mean that a family of four flying from Belfast to London would expect to fork out £128 on taxes alone, according to the body.
In addition, a report drawn up for low-cost airline easyJet estimates that APD could ultimately bring a reduction of 104,000 passenger journeys through Northern Ireland.
The Treasury has introduced a consultation process into the impact of the tax, while ensuring the aviation industry pays for its negative effects on the environment.
Speaking to Stormont's Enterprise, Trade and Investment Committee, Consumer Council head of transport Scott Kennerley called for the abolition of the levy.
"We intend to call for APD to be removed from all air travel to and from Northern Ireland, given our high dependence on air travel," he said.
"If you need to travel from Northern Ireland to somewhere else within the UK for connecting to another European airport, for example, we have to fly - so in many cases we pay that charge twice. We don't have an alternative."
The consultation regarding proposals for the future structure of the tax was issued following the UK Budget statement on March 23 this year.
The Government is considering two schemes in respect of changing APD - which is currently levied in four bands, depending on how far you fly.
The first option is to implement a simple APD regime comprising two new tax bands and two classes of travel. The second consultation option is an APD regime composed of three distance tax bands and two classes of travel.
Mr Kennerley said the Consumer Council was opposed to both and would instead be calling for APD to be a devolved Northern Ireland matter.
In Dublin, the equivalent tax of just three euros per person is in the process of being removed by the government, which Mr Kennerley said will encourage even more people to opt for flights from there.
"The more Northern Ireland passengers that travel via Republic of Ireland airports rather than Northern Ireland airports, the bigger the impact, the loss of revenue for HM Treasury, Northern Ireland airports and the region's economy," he said.
Consumer Council research carried out last year showed that there were better public transport links to Dublin airport than to those in Belfast for passengers travelling from Newry and from Enniskillen.
The consultation closes on June 17 and the Treasury will review it during the summer, with changes due for implementation in April 2012.