Wednesday, 28 September 2011

Chancellor cuts APD on Belfast flights

There are signs that the government is concerned about the impact of the rise in Air Passenger Duty as the duty has been slashed for flights from Northern Ireland.

APD on direct long-haul flights from Northern Ireland will be reduced to the same rate as short-haul flights from November 1. In real terms this means a reduction in tax on economy fares to US from £60 to £12 and in premium cabins from £120 to £24. This is good news but not likely to make a great deal of differenceto government coffers as there is only one scheduled long-haul service from Belfast to Newark per day.

Chancellor George Osborne said: Osborne said: “The government has taken 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 valuable business customers – into its airports. By announcing this immediate cut and our intention to devolve aspects of APD, the government is renewing its commitment to stimulating and rebalancing the Northern Ireland economy.”

Could this be the start of something wider and a sign that Osborne is backtracking on APD?