Aviation tax could sound the death-knell for the province’s economic recovery, leading business figures have warned.
The warning comes after an open letter was sent to Chancellor George Osborne asking for an early decision on air passenger duty (APD).
Executives from more than 20 leading firms have told George Osborne they are concerned Northern Ireland will lose its only transatlantic route.
In February the Belfast Telegraph revealed the popular Continental service from Belfast to New York (Newark) was in danger due to tax hikes introduced recently by the Treasury.
As it stands a levy of £60 is being imposed on each US-bound passenger travelling from Northern Ireland — compared to a €3 charge from Dublin Airport, which the American carrier is currently absorbing at huge cost.
Bro McFerran, managing director of Allstate, which is the second largest US employer in Northern Ireland, has told of his fears for his company if the contentious issue isn't resolved.
“If Continental pulls out of Belfast it will make us less competitive and it’s less likely that we’re going to be growing our company, going forward,” he said.
“We’re going to have to pay more for the links, it’s going to take more time to get there, and it’s going to discourage some of our potential customers from coming over to see us, so therefore we’re less likely to get so much business in the future.”
Mr McFerran said the route is crucial to his business — and to the province’s economic future.
“We send at least 400 people on flights across the Atlantic every year and at any given time we would have eight or 10 people in the US. But I know from talking to Continental that they are severely hamstrung because of the air passenger tax, and it seems to me to be absolutely crass stupidity that the Government carry on with this tax.
“We’re a 100% export company so it’s very difficult for us to do export business without flying out of the country, so they’re taxing us on every journey that we do out of the country to try and gain business. It just doesn’t make sense at all.”
A consultation aimed at examining existing air tariffs closed in June. A Government response is expected in November.
But the local business community is calling for action to be taken now, before, as Mr McFerran says, it is too late.
He said: “Continental has made it clear that they will not under any circumstances continue to subsidise this route because, effectively, they are just writing a cheque for thousands of pounds to the Government every time a plane takes off from Belfast.
“It’s a completely unsustainable situation from their point of view and if they pull out it may affect Northern Ireland’s ability to attract inward investment.”
He added: “We have a lot going for ourselves here if you can hop on a plane in New York, get off at Belfast and see all the wonderful things Northern Ireland has to offer. But if you have to go through Heathrow or Dublin it means we’re setting ourselves back 20 years.”
Tony O’Neill, Moy Park business development director, said APD must be addressed.
He said: “For us to continue to grow and bring investment, one of the basic necessities is easy access to international air routes.
“If APD is not addressed urgently, airlines providing these routes will pull out of Belfast and our ability to bring further investment to Northern Ireland will be greatly hampered.”
Background
An open letter sent to UK Chancellor George Osborne has been approved by 23 business chiefs from 21 firms: NI Chamber of Commerce; NYSE Euronet; Belfast International Airport; George Best City Airport; Wrightbus; Allstate Northern Ireland; Bombardier Aerospace Belfast; B/E Aerospace (UK) Ltd; NI Public Sector Microsoft; First Derivatives plc; Moy Park Ltd; Liberty Information Technology; Lightstep Technologies; Ulster & London Ventures; The President’s Club; NI Independent Retail Trade Association; Barrhead Travel; Europa Travel NI Ltd; Selective Travel Ltd Belfast; Oasis Travel, Continental Airlines.
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