Northern Ireland has already scrapped APD on long-haul flights - a move which saved the New York service and has cost more than £2m so far
An economic report for the executive has said there is not a strong
enough case for abolishing a £13 tax on the majority of flights out of
Northern Ireland. Removing air passenger duty (APD) is seen by airports and airlines as key to attracting new routes and growing tourism.
But the report considers the move too costly, as it would
mean a reduction in the block grant to Northern Ireland of at least
£55m. This would cover the loss to the Treasury of revenue it collects from APD on flights locally. "A strong case for change has not been made," the report's authors state. Northern Ireland has already scrapped APD on long-haul
flights - a move which saved the New York service and has cost more than
£2m so far.
The report carried out for the Northern Ireland Centre for
Economic policy said the benefits of abolishing APD on all other flights
would not cover thefigure lost to the block grant.
New routes. The loss is "a very significant impact on the economic cost-benefit outcome", the 67-page report states. The Republic of Ireland scrapped its passenger duty in 2014 and it has helped Dublin Airport attract many new routes.
Scotland is also likely to get power over APD. Instead of a go-it-alone move on APD, the executive is
looking into financial help for airlines to operate new routes to the
likes of Canada, Turkey and Germany.
Aid would cover 50% of landing charges. "The Department of Enterprise may wish to consider a more direct targeted intervention," the report concludes.
Northern Ireland's three airports have explored accessing a
£20m fund set up by the Chancellor George Osborne to help regional
airports throughout the UK. Should applications be unsuccessful, the executive may look at its own version. In 2007, a local £4m air route development fund helped to attract nine new routes, including New York. From this May, the chancellor has announced that APD will not apply to children under 12.