Transatlantic tax break has cost Stormont £11m since direct flights to US ended in 2018

Treasury continues to take cut from block grant despite no regular long haul flights since 2018

Aerial photo of Belfast International Airport's passenger terminal.
The last regular transatlantic service from Belfast International Airport' ended in October 2018.

Maintaining a zero rate of air passenger duty (APD) on long haul flights from Northern Ireland has cost Stormont almost £11 million since the last direct transatlantic service ended in 2018.

The power to set APD rates on long haul flights from the north was devolved to Stormont in 2012.

In practice, the decision to abolish the air tax, means the UK Treasury takes a cut from the Northern Ireland block grant every year, even when no flights operate.

The total cost of retaining a zero rate of APD for long haul flights since 2012 has now reached £25.8m.

That doesn’t include additional cash incentives offered to airlines.

The current rate of APD for long haul flights between the UK and United States is £194, which is due to rise to £216 from April 2025.

Direct flights between Belfast International Airport and Newark Liberty International Airport first began in 2005, operated by Continental Airlines.

United took over the operation in 2012 after a merger with Continental.

The service ended in October 2017 after a £9m deal agreed by the Executive and the airline fell through because the financial package breached EU state aid rules.

Low-cost carrier Norwegian Air launched an Aldergrove to Boston service in 2017, but pulled the service in October 2018 citing a lack of customer demand.

While a small number of chartered summer flights continue to operate between Belfast International Airport and Florida, there has been no direct transatlantic service in the north since late 2018.

Since then, the total cost of retaining the zero APD long haul rate has reached £10.826m.

The figures were disclosed by Finance Minister Caoimhe Archibald in response to an Assembly question from SDLP MLA Matthew O’Toole.

“The aspiration of direction transatlantic routes out of Belfast is not a bad one,” said the SDLP MLA.

“But we have to be realistic about the fact we share an island with one of the busiest air hubs in Europe, with special pre-clearance status for US immigration, that makes it unbelievably attractive for both leisure and business travellers.

 The transatlantic flights start in July
Norwegian Air's Belfast International to Boston service ended in October 2018.

“We’re also just a short hop from Heathrow.

“So we have such strong competition, that spending millions of pounds every year for one theoretical route, which hasn’t existed in years, is an unacceptable waste of public money,” he said.

In her response to Mr O’Toole’s question, Caoimhe Archibald said the £25m cost since 2012 “represents the reality of tax devolution”.

She said: “We bear the financial consequences of devolving a tax, and the risk that revenue, and the activity that generates it, can either rise, or fall – which has happened in this case.

“This is consistent with the approach to tax devolution in Scotland and Wales.”

Leader of the Opposition Matthew O’Toole expressed regret at the number of MLAs from the two parties who were present in the chamber
Matthew O’Toole. (Oliver McVeigh/PA)