28-Sep-2011 9:53 AM

Chancellor of the Exchequer announces cut in Northern Ireland long-haul flight tax

Chancellor of the Exchequer George Osborne, in consultation with the Secretary of State Owen Paterson and the Northern Ireland Executive, announced (27-Sep-2011) that from 01-Nov-2011, the Air Passenger Duty (APD) will be reduced for passengers travelling on direct long-haul routes departing from airports in Northern Ireland. The direct long-haul rate of APD will fall to the lower short-haul rate – currently GBP12 per passenger in economy and GBP24 for business and first class passengers from previously GBP60 and GBP120, respectively. The Chancellor added the reduction will allow Continental Flight CO95 from Belfast International to New York/Newark to continue to operate. Mr Paterson stated the move will "help safeguard the vital direct link from Belfast to the US and make it easier to develop other long haul routes to attract foreign direct investment and increase tourism”.

The Board of Airline Representatives in the UK (BAR UK), representing 86 airlines, welcomed (27-Sep-2011) the move, but claimed the decision is "seen as an admission that high levels of taxation are impeding economic recovery". BAR UK urged the Government "not to restrict reductions to just one part of the UK but to implement fair taxation for everybody". British Air Transport Association CEO Simon Buck stated the cuts did not go far enough. "This one-off tax cut for transatlantic passengers does nothing to help people travelling between Northern Ireland and the mainland who still face a double APD on all outbound and incoming domestic flights. This is in addition to the APD that continues to be levied on all flights to Europe. Indeed, it is these other routes that will effectively be subsiding transatlantic travellers, and doing nothing to help the passengers or airlines that are suffering from the already high levels of APD," he said (Reuters/RTE/Travelmole/Bloomberg/Business Traveller/The Telegraph, 27-Sep-2011). Virgin Atlantic said it hoped the Chancellor would also cancel the proposed double inflation increase planned for next spring. "As the UK has some of the highest aviation taxes in the world, we would suggest that the same arguments should apply to the rest of the UK, which risks losing business to Continental European hubs to the detriment of the British economy as a whole," CCO Julie Southern said.  Flybe MD Andrew Strong also urged the Government to reduce APD on other regional routes. "Flybe welcomes the Chancellor’s acknowledgement that air services from the UK’s regions are impacted by the high price of APD. Indeed we look forward to the Treasury expanding these plans so that other lifeline regional routes, including domestic lifeline routes, may receive a differential rate of APD," he said. Belfast International Airport MD John Doran commented: “This has been a challenging but ultimately rewarding path. We now need to capitalise upon the opportunity, garner our resources and make it as easy as possible for visitors and investors to come to Northern Ireland." [more - original PR Board of Airline Representatives in the UK] [more - original PR - Secretary of State for Northern Ireland] [more - original PR Chancellor of the Exchequer]

UK Chancellor of the Exchequer: “The Government has taken proactive measures to protect the only direct long-haul service operating from Northern Ireland and with it the jobs of those who serve the Belfast route. Northern Ireland faces a unique challenge in attracting traffic – including very valuable business customers – into its airports. By announcing this immediate cut and our intention to devolve aspects of APD, the UK Government is renewing its commitment to stimulating and rebalancing the Northern Ireland economy," George Osborne. Source: Company Statement, 27-Sep-2011.

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