Duties on flights departing the Irish Republic are traditionally lower than those on flights from Northern Ireland so the government has cut duties to foster competition. Amidst fears that Northern Ireland would lose a direct route to the United States, Continental Airlines announced that their flights to Newark from Belfast would continue.
In a proactive move to save the only long-distance direct flight out of Northern Ireland, with jobs at stake, the government decided to take a proactive step by reducing taxes on the Belfast – Newark NJ route. According to Chancellor Osborne, Northern Ireland faces challenges which are unique in terms of attracting air traffic.
The air passenger duty rate will be lowered to the same as that for short haul trips from its current rate of £12 on economy class and £120 for first class and business class. Flights out of Dublin have a duty of only 3 euros. The government will also transfer to the Northern Ireland Assembly for certain portions of the tax.
With the economy throughout Britain being sluggish, the government is making moves to foster growth and/or stability wherever possible. Since Northern Ireland is in direct competition with the Irish Republic, this move was necessary to protect jobs involved at the airport. It is government’s hopes that reduced duty will encourage more business travelers to fly into and out of Northern Ireland.
Earlier in the year, the Northern Ireland Affairs Committee advocated the abolishment of the duty altogether. Whilst government didn’t go quite that far, the reduction in long distance duty is a step in the right direction. It is hoped that this will not only foster competition with the Irish Republic but will keep the people working those flights and support for those flights in jobs. This is a small move towards protecting a fragile economy, but at least it is a proactive move.