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Ryanair demands air taxes cut amid Belfast flights decision

Published 07/01/2016

Ryanair's David O'Brien speaking at Belfast International Airport
Ryanair's David O'Brien speaking at Belfast International Airport
Ryanair will operate a four times daily service to London Gatwick from Belfast International from March

Ryanair has called for the abolition of "outrageous" air taxes in Northern Ireland before any decision is made on operating European flights from Belfast.

It is paying £13 (around 17 euro) in air passenger duty (APD) per passenger and senior managers said the cost eats up profits and heightens the commercial risks of flying further.

The low-cost Irish airline confirmed that it will operate a four times daily service to London Gatwick from Belfast International from March and said five more routes are to follow in October.

Those destinations have not been decided and could concentrate on UK airports if movement is not secured on cutting tax, Ryanair chief commercial officer David O'Brien said.

He added: "We are not asking the Government for money, we are asking them to stop taking money from us and if they don't we will make decisions on that basis."

Dublin has abolished its air passenger duty and has seen massive increases in passenger numbers. Many travellers from Northern Ireland use services there where fares can be lower because of the different tax system.

However removing APD could result in a large reduction in the block grant from Westminster which runs public services in Northern Ireland.

A total of three Ryanair aircraft representing an investment of 300 million US dollars (£206 million) will be based in Belfast. More than one million customers are expected to use Ryanair in Belfast annually, supporting 750 jobs.

The Gatwick slots became available after they were given up by Irish flag carrier Aer Lingus as part of its take-over by the International Airlines Group (IAG).

Ryanair already flies from City of Derry Airport in Northern Ireland.

Recently Dutch flagship carrier KLM announced plans to fly from Belfast to Amsterdam, there is an established service to New York and Stormont politicians are keen to expand international connections.

Mr O'Brien said he was not making any threats to the powersharing political administration in Belfast over tax but said the airline would make its decisions on a commercial basis.

He added that, with thousands of extra tourists expected to use the routes, one alternative to abolishing the tax could be additional payments from the all-island Tourism Ireland promotional body to help cancel out the effect of the tax.

The senior executive added it would be a missed opportunity for Northern Ireland if APD was not removed.

"If this tax is going to be there, we might as well minimise the amount of flying we have to do to carry passengers, flying for less than an hour rather than flying three hours over to Berlin or wherever it is.

"If you fly less distances on established routes against carriers that are unable to compete against you it seems to make more economic sense rather than take a punt at flying three times as far for unknown returns."

He added: "One of the tragedies for Northern Ireland aviation is that the airports here do an excellent job to achieve efficiencies and low cost bases which is necessary to compensate for an outrageous tax imposition, which is a multiple of the cost base the airport is able to achieve."

Graham Keddie, Belfast International Airport's managing director, is strongly opposed to APD and will give evidence to MPs about the issue soon.

"If we are going to get serious as a country and have a government serious about that then APD is critical."

He added: "The airports have been banging on about this for years, now we have got to see some aspiration and courage from the Government and Civil Service to see what we can do to make the connectivity of Belfast better."

A spokeswoman for Stormont's Department of Enterprise, Trade and Investment (DETI) said an assessment had found APD was not a strong tool for economic development.

"Any reduction in APD in Northern Ireland alone would therefore have to be paid from Northern Ireland's public finances. 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.

"Work to progress an Air Route Development Fund for Northern Ireland is ongoing and the DETI minister intends to be in a position to announce the way forward before the end of the financial year."

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