Belfast Telegraph

BA boss: Flights tax could put Belfast to Heathrow at risk

By Clare Weir

Northern Ireland's air tax premium over the Republic could present an "underlying risk" to the Belfast to Heathrow route, according to the boss of British Airways.

However Willie Walsh, chief executive of BA's parent company IAG, reiterated that the company is committed to the route after buying over rival carrier bmi from Lufthansa earlier this month in a £172.5m deal.

Bmi currently operates the Belfast to Heathrow service from George Best Belfast City Airport.

BA withdrew a service from Belfast International to Heathrow in 2001 with the loss of 160 jobs in what Mr Walsh described as "a totally different environment" at a time when the company was making losses of £10m per year.

Mr Walsh said that while IAG will rebrand the main bmi business and the Heathrow flight, it has no plans to retain bmi Regional, which offers short-haul flights from Aberdeen, Edinburgh, Glasgow, Leeds Bradford, Manchester and East Midlands, or bmibaby, which flies from George Best Belfast City Airport to East Midlands, Birmingham and Manchester airports and some European destinations.

"I have already said that we intend to sell the businesses and we don't see a future for them as part of our group," he said.

"There has been one interested party in talks and two expressions of interest so far in bmi Regional and there are three interested parties in bmibaby, with one new party coming on board for talks in the last few days.

"However we are completely committed to sustaining the Belfast to Heathrow route, bmi has done very well with the route and it will now become part of the BA branded network.

"It is an important route and we look forward to taking it on."

But Mr Walsh added that the spectre of Air Passenger Duty (APD) is still presenting a problem. Late last year, APD on short-haul flights from Northern Ireland was reduced from £60 to £12 for passengers travelling one way in economy class, and from £120 to £24 for those in business class.

Since this month these rates climbed to £13 and £26 respectively.

APD on short-haul and domestic flights from Northern Ireland, and duty paid by travellers across the rest of Britain remains unaffected.

Continental Airlines, which flies to New York Newark from Belfast - Northern Ireland's only long-haul flight - and from Dublin, had threatened to scrap the Belfast services because of high taxes. The equivalent tax on flights from Dublin is just £3.

Mr Walsh said that since November, Northern Ireland travellers have already changed their flying habits as a result.

"There is already evidence to show that people who would have traditionally flown from Belfast to Heathrow to connect to the western USA are now taking the Continental flight and connecting from there - habits have changed rapidly because people are being careful about what they spend.

"This is an untintended consequence of reducing APD - I would like to see it scrapped altogether. It is an issue and it is an underlying risk to the Heathrow route, competitiveness is being destroyed.

"How governments set taxes is hugely important and I will be speaking to politicians at a local and national level to see how we can resolve this issue."

In Northern Ireland to address the Londonderry Chamber of Commerce, he added that despite the high profile City of Culture celebrations due to take place in Derry next year, there was no interest in developing any routes from the city's airport.

"I have not been to Derry in about 10 years and there are a lot of changes for the better," he said.

"The next few years in terms of tourism and the economy will be very exciting for the city and for Northern Ireland as a whole but for now our focus is Belfast and while I will be speaking to the people at City of Derry airport, flights are not in our immediate plans."