Not slashing tax for Northern Ireland fliers is just plane stupid: campaigners
Freezing Air Passenger Duty (APD) will not protect airlines operating to and from Northern Ireland, a watchdog has said.
The Consumer Council issued the warning after it emerged that Chancellor George Osborne is not expected to impose any hikes in today’s Budget.
Under plans introduced by the previous government, the Treasury was expected to bring in the rises in APD next month in line with inflation.
This means a family of four would have faced a £351.90 tax on a long-haul holiday — an increase of around £16, at a time when spiralling oil prices are putting a huge strain on finances.
But the Consumer Council’s Andy McClenaghan told the Belfast Telegraph that the Government still runs the risk of failing to protect local travellers.
“If, as expected, the chancellor does no more than freeze air passenger duty in this year’s Budget then he has failed to deliver,” said Mr McClenaghan.
“Northern Ireland passengers are heavily reliant on air travel, so even with rates frozen at between £12 and £85 for an economy class ticket, the Consumer Council estimates APD will cost passengers here approximately £54 million in 2011. More still needs to be done to protect Ulster consumers.”
Stormont ministers have already been having crisis talks with Treasury officials amid fears that crippling airport taxes will lead to the loss of major air routes over the next few months.
Currently, passengers in Belfast have to pay up to £12 each for flights up to 2,000 miles and £60 for flights up to 4,000 miles, rising to £85 for destinations over 6,000 miles.
That compares with APD of just €3 (£2.50) extra paid by passengers flying out of the Republic to any destination from the start of this month.
In response to fears that the APD differential will divert passengers away from Northern Ireland airports and towards the much more cheaper Dublin and beyond, the consumer champion has called on the UK Government to reduce the current level.
“We are concerned that this situation may lead to decreased demand for flights and further damage the long-term viability of airlines operating to and from here,” Mr McClenaghan said.
Continental Airlines, which operates flights to the United States from both the main Irish hubs, recently moved to deny speculation that the increased APD was threatening its Belfast-New York route.
At present, because of the new level of APD introduced in November 2010, New York bound passengers from Belfast must pay £60 — and increase of 33%.
UK aviation tax rates are now the highest in any European country, with a 140% hike in short haul travel and between 200% to 325% for long haul.
Meanwhile, ministers are still considering plans for a form of the fuel duty stabiliser, which cuts taxes when oil prices are high.
This was promised by David Cameron when in opposition.
With fuel duty rising on airlines, it is unlikely that passengers will see any appreciable cut in the cost of airline fares, but scrapping the expected rise in APD will at least be some consolation.