Business leaders welcome decision to cut aviation tax
Northern Ireland’s business leaders have said the decision to cut punitive aviation tax will give the local economy a massive boost.
Directors from the province’s top companies were speaking after the Government announced its decision to slash air passenger duty (APD).
The move comes after the Belfast Telegraph warned that Northern Ireland’s only direct flight to America was at risk because of the punitive levy.
In February, we revealed that Continental Airlines was poised to pull its Belfast to New York/Newark route unless immediate action was taken.
On flights from Belfast, US-bound passengers were paying a tax of £60 or £120 for economy and business class respectively, compared to just €3 from Dublin, where the airline also operates.
Earlier this week, Chancellor George Osborne took the radical step of reducing the tax to save the route at the 11th hour — an intervention that has been welcomed in business circles.
Tony O’Neill, business development director at Moy Park food company, said the cut — to £12 per passenger on economy and £24 on business flights — was crucial.
“Continued access to these crucial routes enables companies such as Moy Park to continue to grow and develop on an international scale,” he said.
Chairman of the Federation of Small Businesses (FSB) Wilfred Mitchell said the tax reduction will help rebalance the local economy. He added: “It was imperative that the route was not lost in a knee-jerk reaction to pressure from Continental Airlines over costs.”
It has emerged how dangerously close we came to losing the service. The airline — which was set to pull out of Belfast early next year — recently told MPs the route would cost it £3.2m this year, rendering it no longer viable.
“Continental made it quite clear that when there’s a levy of £60 per economy passenger in Northern Ireland and €3 (£2.60) in Dublin, that was an unbridgeable difference unless something radical happened,” Secretary of State Owen Paterson said.
In February, the Belfast Telegraph revealed that punitive air passenger duty (APD) was threatening to kill off the daily flight between Belfast and New York. Yesterday, Chancellor George Osborne cut the tax on direct long-haul routes. Had this not happened, Continental Airlines was poised to pull the route. Aspects of APD will be devolved to Stormont.