MORE BELFAST AIR ROUTES MAY BE CUT GLOOMY PREDICTION BY TOP ECONOMIST
TRAVELLERS flying from Northern Ireland should brace themselves for more routes being cut after Brexit, an economist has said.
John Simpson issued the warning after Ryanair and Aer Lingus announced they were scaling back their services from Belfast International (BIA) and George Best Belfast City respectively.
The shock move to pull back operations was slammed by DUP MP Ian Paisley, who said it represented “dirty Dublin tricks attacking Northern Ireland’s tourism business”.
Tourism Ireland has denied the MP’s claim.
Industry sources, meanwhile, pointed to air passenger duty (APD), a levy that can add up to £26 on any return domestic flight from Northern Ireland, as the main reason for the carriers’ decision to cut a total of five destinations from the Belfast hubs.
But Mr Simpson said ditching the routes — to Manchester, Berlin, Lanzarote (from BIA) and to Faro and Malaga (from City) — was “a reflection of market demand”, adding that it may be “a sign of things to come”.
“It’s an illustration of the way in which the economies will be affected in the post-Brexit world,” Mr Simpson said.
“It’s reasonable to assume that other routes might go as well.
“Whatever happens with Brexit we will live through a major adjustment process, whether it is in air travel or in terms of importing things that become in short supply for a time. Northern Ireland should brace for further painful adjustments to the Brexit process.”
A spokeswoman for George Best Belfast City Airport last night said Brexit wasn’t to blame.
“We understand that the loss of Faro and Malaga routes was not a result of Brexit and we do not foresee any route cancellations due to Brexit,” she said.
A BIA spokeswoman said the air tax was a massive problem.
“Due to Northern Ireland’s location we will always need to fly, resulting in a strong demand for air travel,” she said.
“We do, however, need a level playing field when it comes to APD which is hampering route development for our airports.”
APD can mean that up to £26 is added in tax on any return domestic flight from Northern Ireland while, by contrast, there is no equivalent tax on flights from the Irish Republic. Chief executives of Belfast International, Belfast City and the City of Derry Airports have strenuously lobbied for the tax to be abolished on short haul flights.
Mr Simpson said operational decisions are often made for reasons of profitability adding that it was “unreasonable to expect airlines to continue to operate loss-making routes”.
“Airlines don’t close profitable routes, if they close a route it’s losing money and there’s nothing that taxpayers should do about that,” he said. “So long as APD exists and is applied fairly across all eligible routes it’s a bit unreasonable to blame the tax for what in fact is actually a measure of market demand which is not adequate to support the routes.”
Mr Simpson said that even if Northern Ireland opted to foot the bill for APD via its block grant from the UK Government there was no guarantee that certain routes would survive.
“We could end up subsidising the routes via APD and still lose them in the long run,” he said.
“Interfering with the market economics of air routes is not something we should take too easily.”
He added: “The choice of routes from a major airport like Dublin will always be better (provided we can get there quickly) than trying to promote routes that won’t pay their way from a smaller airport in Northern Ireland.
“In terms of the island of Ireland we shouldn’t be surprised that only one location is going to develop all the modal connections around the world.”
Niall Gibbons, CEO of Tourism Ireland, said it was “very regrettable” that Ryanair and Aer Lingus had cancelled services.
“We continue to promote Northern Ireland vigorously around the world to ensure that the contribution of overseas tourism to the local economy continues to expand,” he said.
DUP MP Paul Girvan called APD “an economic drag” and said his party ensured that it was “included within the confidence-and-supply agreement”.
He added: “That ensured that a consultative report was published, followed by the establishment of a technical working group. That group is looking at the economic, legal and operational issues associated with APD. Whilst that continues no changes in APD can be made until the UK leaves the EU.”
We do need a level playing field when it comes to APD, which is hampering route development for our airports