Flybe pulled outdue to tax duty

Clive Coleman, Technical Director at Parsons Brinckerhoff, which manages the Eglinton facility, said Flybe switched from Londonderry to Knock, because of Air Passenger Duty (APD).

Airport Manager Damien Tierney said a tax of £26 on a return seat from Londonderry to Stansted was also preventing low cost Irish carrier Ryanair from expanding is operations at City of Derry Airport.

Mr Tierney said: “Every single conversation that we have with Ryanair starts with APD. We are asked whether there has been any movement on APD or whether the Northern Ireland Assembly is going to make any changes to APD. Ryanair says that it cannot grow until the situation changes.”

The local airport boss made the comments in an briefing at the Northern Ireland Affairs Committee at Westminster.

He said passenger duty was restricting growth in the market and that it has had discussions with it over the past two years about developing routes out of City of Derry Airport.

“It has told us quite clearly that routes into the UK will not be developed any further than they are currently and that there may be retrenchment. Ryanair has pulled 18 per cent of seat capacity out of the UK, year on year, for the past two years, and it has moved that off to Spain and Germany, where there APD is less,” said Mr Tierney.

“Ryanair is a profit-driven organisation, so it will move to where it can make more money. A tax of £26 on a return seat from City of Derry Airport to London Stansted is a lot of money, when you consider that the average fare that Ryanair charges is probably £60 or £70.

“Therefore, £26 on top of that is a lot of money. The fact that APD is restricting growth is in itself a problem. Ryanair is not on its own on this. easyJet will be in the same position, as will Flybe. As it stands, the fact that APD is there is restricting growth into and out of Northern Ireland,” he told MPs.

Asked by Independent Unionist MP Lady Sylvia Hermon if APD was the main deterrent for new carriers, Mr Coleman said: “It varies. Yes, that is the case for some of the carriers, but there are a range of factors for other carriers.

“Take Flybe, for example. It operated a very short series from City of Derry Airport last year. It operated for four months, and that was all that it was guaranteed to operate for. It looked at it again this year, but it had other options, one of which was to go to Knock, and, because of APD, it chose Knock.

Meanwhile, referring to the possibility of public subsidies for routes out of Londonderry, Mr Tierney said it would be difficult to justify given Ryaniars successful commercial operation from the city.

He also referred to the decsion by the Dublin Government to reduce the number of Public Service Obligation (PSO) routes it funds.

Mr Tierney said: “The Irish Government took a view on PSO routes from Dublin to all its regional centres, or as many regional centres as it could. The Republic has now retrenched, and there are now only two PSO routes in the Irish Republic.

“The UK Government never had the same appetite for PSO-type operations. Bearing in mind that we have a twice-daily operation to Stansted with a commercial carrier, it would be difficult to persuade the UK Government to look at it as a PSO route, as someone is already prepared to do it without a PSO. If that service were to be lost, we would have to examine that, but it is not something that we would look at at this stage.”