Duty cut is not a flight of fancy
Published 21/10/2013 | 01:30
The Republic's Air Travel Tax (ATT) has been charged at only €3 per passenger since March 2011 and the government there has just announced it will remove the tax altogether next April.
Meanwhile, in Northern Ireland, we are still paying £13 per passenger, per flight for short-haul journeys and – incredibly – we pay more in taxes to fly to Glasgow than New York.
In response to pressure from stakeholders, including the Consumer Council, the UK Government reduced Air Passenger Duty (APD) for direct, long-haul flights from Northern Ireland from £60 to the short-haul rate (then £12) in November 2011.
Then, in January this year, the Executive took the decision to remove the charge altogether.
But long-haul flights represent a fraction of all journeys made by Northern Ireland passengers: 98.5% of all journeys are short-haul. Only four other EU countries charge APD, all at lower rates than we do, and they are all in mainland Europe, which means passengers have the choice of other means of transport.
Given Northern Ireland's geographic location, we are heavily dependent on air travel, particularly to get to Great Britain and for access to hub airports.
In November 2012, MPs supported a motion for the Treasury to commission a comprehensive study into the full economic impact of APD in the UK.
The Consumer Council wrote to the Chancellor, stressing the importance of ensuring that the study has a specific focus on Northern Ireland.
We need to know, as a matter of urgency, whether the proposed cost to the Executive of removing APD – estimated at £60m-£90m – would be outweighed by the benefit to consumers, business and the wider economy.
If we do nothing about APD, the risk is that decreased demand for air services from Northern Ireland's airports could lead to a decline in the number of services and routes.
The Consumer Council is restating our call on the Chancellor to confirm the economic impact of APD for Northern Ireland and ensure passengers here are no longer unfairly affected.