City of Derry Airport was knocked back in a bid to get support for high priority routes to Manchester and Birmingham but will receive £200,000 to fund a newly reopened route to Dublin over the next three years.
Air Passenger Duty (APD) is strangling the local air hub, which since 2010 and the institution of a new managements regime, has “improved in all respects, apart from route development and passenger numbers.”
That’s according to Clive Coleman, the contracts director for Regional and City Airports, which operates Eglinton for the Council.
Mr Coleman made the comments at the Northern Ireland Affairs Committee last week. He was there to tell members how to promote the tourism industry locally using the tax system.
The £13 APD premium on cheap tickets is making routes non-viable, said the airport boss.
“The primary reason for that is APD. It is important to note that traffic at the airport is low cost and APD represents a substantial proportion of the ticket price,” he said.
“As you know, the North West is a very price-sensitive market, and a number of potential routes to CoDA are rendered financially non-viable due to APD.
“Many airlines, when we do our aviation developments, have told us that they are unlikely to operate new routes to CoDA unless APD is reduced or repealed, or they are compensated.
“That potentially reduces the economic stimulus of inbound tourism and connectivity,” said Mr Coleman.
The airport chief also revealed City of Derry was refused funding for re-opened routes to Manchester and Birmingham.
“We are grateful to have been successful through the regional air connectivity fund for one route. We applied for a couple of routes, but we had a success in re-establishing the City of Derry to Dublin route.
“That will hopefully start in the spring. The challenge of that is that it took nearly two years from the Chancellor announcing it in the statement in the spring of 2014 to having a decision.
“Two other desired routes - higher priority, higher volume routes - to Manchester and Birmingham could not be funded because of the restrictive nature of the rules of the fund.
“It is interesting to note that the level of support we are going to get for the Derry to Dublin route is roughly equivalent to the level of APD that the Treasury will receive from that route, so it effectively ends up being cost-neutral.
“So our experience is that APD restricts growth and connectivity to CoDA and to Northern Ireland, which obviously reduces inbound tourism, economic growth and job creation.”
He also said the airport would like to see the Ministry of Defence (MoD) open up its RAF Northolt airfield in Ruislip to carriers to and from Londonderry.
This would be a more convenient destination than the current option of Stansted, located 30 miles out of town in North West Essex.
He made the comments when asked for his opinion on the debate over London’s aviation needs and its implications for Northern Ireland.
“For pragmatic reasons, there are suggestions about having a temporary solution, such as developing RAF Northolt so that it is not just used for
high-yielding corporate flights. It could be used for short-haul domestic routes.
“Flybe has heavily promoted that, with connectivity promised into a number of second-tier UK regional airports, such as City of Derry and Inverness. That is something that you should be interested in, because pushing the MOD to release capacity at Northolt could provide a kicker to better connections into London and, in particular, Heathrow.”