Business Irish

Thursday 8 December 2016

Airport tax cut boosts tourism

John Cradden

Published 14/06/2015 | 02:30

Dublin Airport
Dublin Airport

Ireland's decision to abolish its air passenger tax last year has made it a more competitive location for tourism, international business expansion and labour mobility - but has also created a new headache for Northern Ireland's airports, according to a new report.

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The report, by international accountancy network UHY, says the UK has the highest flight taxes in the EU, at €18 for a short-haul flight and €36 for a first or business class ticket, giving Ireland an advantage vis-a-vis Northern Ireland.

"Countries and cities that are expensive to fly to lose out on tourism," said Alan Farrelly, a partner at UHY Farrelly Dawe White.

"High air taxes can also be harmful to businesses, as in many commercial relationships there is simply no substitute for face-to-face contact.

"There is now significant concern in Northern Ireland about what kind of impact the scrapping of the air tax in Ireland will have on Northern Irish airports - where travellers still have to pay an air passenger duty".

Until February 2011, there were two rates of tax in Ireland: €10 for each passenger flying to an airport more than 300 km from Dublin Airport, and €2 per passenger flying to any other airport within 300 km. This was changed to a flat rate of €3 before being scrapped entirely in April 2014.

Earlier this week, Belfast International Airport (BIA) CEO Graham Keddie called for the Northern Ireland executive to abolish air tax on short-haul flights.

"The Republic of Ireland and the Netherlands saw the damage the tax was doing and got rid of it," he told the Belfast Telegraph.

The airport has also reportedly been struggling to attract new long-haul routes partly because of stiff competition from Dublin Airport, which recently reported a 52pc jump in passengers from the North.

BIA has only one transatlantic route - a New York/Newark service - which itself was only saved when air passenger duty on long-haul flights from Northern Ireland was scrapped in 2011.

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