Belfast Telegraph

Aer Lingus chief backs ‘gamble’ of scrapping APD

By John Mulgrew

Scrapping air passenger duty for Northern Ireland flights is a “significant gamble” worth taking, according to the boss of Aer Lingus.

Stephen Kavanagh, chief executive of Aer Lingus, told the Belfast Telegraph at the Iata annual general meeting in Dublin, that with Northern Ireland’s ‘geographical’ disadvantage, the air tax on departures is continuing to hold the region back.

The Republic brought an end to the duty back in 2013, and airlines and airports have argued it continues to make Northern Ireland less competitive.

“It’s such an important industry (aerospace) on the island, from Bombardier to Thompson Aerospace,” Mr Kavanagh said.

“It’s a significant gamble, particularly for Northern Ireland, in terms of domestic travel. It’s a region in which geography disadvantages it, and it’s being further disadvantaged by APD.

“Even within the UK context, it’s unfair. Anything that adds to the cost of a ticket for consumers, dampens demand.

“If the input price is too high for access, it’s dampening economic activity.”

He added: “What’s the worst that can happen? You can always put it back. It’s up to those who are calling for its abolition to demonstrate why.”

Newly appointed Finance Minister Mairtin O Muilleoir says he wants the Executive to have full control over the tax here.

Cutting it in Northern Ireland, if possible, would mean a reduction in the Block Grant from Westminster.

“I think the market is very efficient. The experience of the Irish government in 2013 was significant,” Mr Kavanagh said.

“Now, particularly that there is such a wide variety of airlines with access to Northern Ireland, I think you can assume that there will be enough competition within the airlines to see that stimulus being responded to with capacity.”

Speaking about APD, Mr Kavanagh also told journalists during a separate briefing that “given the experience in Ireland, the positive political situation to remove departure taxes... has been very much rewarded.”

Belfast International Airport’s Graham Keddie said the “zero-rate tax in the Republic of Ireland hands Dublin a great advantage over our airports in Northern Ireland”.

“It is not fanciful to say that thousands of new jobs would be created if APD was consigned to history,” he added.

Belfast Telegraph Digital