UK Government Consultation on Air Passenger Duty

The Londonderry Chamber of Commerce welcomes the opportunity to formally respond to the public consultation on Air Passenger Duty. The Londonderry Chamber of Commerce is the principal business organisation in the North West of Ireland, representing over 450 members. Our membership includes many of the largest employers in the region.

The Londonderry Chamber contests that Northern Ireland is a peripheral region, situated on the western edge of the European continent and therefore the strongest possible range of air access is vital for the positive development of the regional economy. We believe that UK APD levels applying in Northern Ireland is compounding the challenge for us to grow and develop air access corridors to this region, all the more so when set alongside strong, proactive moves being undertaken by the Republic of Ireland Government to further bolster their comparatively strong air service network in order to assist further inward investment and tourism growth.

Our Challenge is therefore unique and requires government to find a solution to our region that does not negate our ability to grow our economy. We are seeking to develop the economy assisted by inward investment and tourism growth from GB, Europe and North America initially, but ultimately also from the developing „BRIC‟ economies.
For our region to be economically competitive within a relatively small island market we urgently need to assume local responsibility for the setting of our own APD levels, through devolution of this matter from London. This action would urgently enable us to address the enormous disparity regarding long haul services (notably North America, which is a critical present and future source of economic growth opportunity for NI, and where the present disparity is at its greatest):

We wish to make a number of further observations to underpin our message hern Ireland is a peripheral region, situated on the western edge of the European continent and therefore the strongest possible range of air access is vital for the positive development of the regional economy.

1. The issue of UK APD levels applying in Northern Ireland is compounding the challenge for us to grow and develop air access corridors to this region, all the more so when set alongside strong, proactive moves being undertaken by the Republic of Ireland Government to further bolster their comparatively strong air service network in order to assist further inward investment and tourism growth. This position is unfair, unsustainable and places Northern Ireland at an obvious and distinct disadvantage.
2. Northern Ireland must be enabled to play on a level playing field with the Republic of Ireland and not held back by a regressive tax. The current level of APD makes Northern Ireland a less attractive place in which to do business, compared with its neighbour sharing the same land mass.
3. Of particular concern is the risk that the current rates of APD pose to Northern Ireland's one and only direct trans-Atlantic service to the United States. Since its inception six years ago, the Belfast-Newark service has carried just over 600,000 passengers, 40% of them inbound tourists and business visitors. Based on conservative estimates made by the tourism and enterprise authorities, it has generated revenues to the Northern Ireland economy of just over £100M, and accounts for several thousand new jobs directly related to foreign direct investment placed in the region due to the availability of direct access. Without a favourable outcome to this consultation, there is a very real threat that the airline will be left with no other option but to withdraw from the Northern Ireland market with the loss of a vital tourism and business link to the United States. This will result in irreparable long-term damage inflicted on Northern Ireland's standing and international reputation due to the "blight" that the loss of the route would create on other prospects for many years to come.

It is imperative that the outcome of the present consultation on APD provides Northern Ireland with the means to safeguard economically-significant air routes and extend our reach to important source markets for tourism and business globally. This is the only way that Commercial aviation can support the pressing need to rebalance the Northern Ireland economy.