The Caribbean Tourism Organisation (CTO) has welcomed the UK Treasury announcement that it will reduce the Air Passenger Duty (APD) rates for long haul flights departing from Northern Ireland. This is seen as a sure sign that the UK government is giving consideration to the issues raised about APD arising out of its stakeholder consultation on APD reform.
The reduction in APD for Northern Ireland acknowledges the importance of vital air routes to the economy and the positive impact that aviation can have on economic growth and sustainable job creation.
The Northern Ireland case is confirmation that the travelling public is paying increasing attention to the cost of flights and that they are willing to travel further to catch a flight if it saves them money. The UK government’s decision to reduce APD levels in Northern Ireland follows clear evidence that passengers were prepared to travel from Belfast to Dublin where levels of ticket tax are significantly lower at €3 (approximately £2.50) per passenger compared with £75 in economy and £150 in premium cabins from Belfast. Officials feared that present high levels of APD would have ended transatlantic air services to Northern Ireland and jeopardised the province’s economy.
For the Caribbean, there is already evidence that market distortion caused by APD is resulting in the reduction of some air services from the UK. Tourism is the Caribbean’s biggest export and the UK is one of its biggest markets, with many countries, especially the Eastern Caribbean states, highly dependent on this market. In 2010, 23 percent of all arrivals to the Caribbean from Europe came from the UK, with 56 percent of UK arrivals going to the Caribbean Community (CARICOM) sub-region.
CTO chairman, Minister Skerritt said: “It is because of the value of tourism to the Caribbean that the CTO has been actively engaging with the UK government to ensure that it understands why the region takes this issue so seriously. We look forward to the UK government’s response to the APD consultation, due this autumn, and hope that the outcome not only rectifies the discriminatory aspect of the banding system but that it seeks to provide a solution to the problem of the impact that very high long haul APD rates is having on people’s choice of destination and scheduled carriers decisions on where and when to fly.”