From 1st November 2011 the direct long-haul APD rate will be reduced to the short-haul rate, which is currently £12 per passenger in Economy Class and £24 for First and Business Class passengers. (Long-haul rates of £60 and £120 currently apply.)
The change will have particular impact on Continental Airlines, which has, along with the Northern Ireland Executive, being lobbying hard for a decrease.
George Osborne also announced a process to devolve aspects of APD to the Northern Ireland Assembly, “as a recognition of its unique circumstances”. First Minister Peter Robinson expressed the hope that such devolution would enable the Northern Ireland Executive to obtain flights to new long-haul destinations. “We anticipate that we will bring proposals to our Executive colleagues that would further reduce this tax to at least the level in the Republic of Ireland as soon as it is devolved,” he added.
Yvonne Muldoon, Sales Manager – Ireland/Northern Ireland for Continental Airlines, told ITTN: “United welcomes the decision by the UK Government to reduce the rate of Air Passenger Duty payable on transatlantic flights from Northern Ireland, as well as its commitment to devolve APD competence to the Northern Ireland Government.
“The rate reduction will relieve some of the cost burden that Continental has borne on its Belfast – New York/Newark service in order to keep its fares competitive with those out of Dublin.
“We have decided to continue operating the Belfast-New York/Newark service in light of this reduction in APD and in reliance on the commitment to devolve APD competence to the Northern Ireland Government. However, departure tax-rate parity with Dublin (currently €3.00) is the best way of ensuring the viability and continuance of the Belfast service.”