3 'Leakage' to Dublin Airport |
36. There is a significant number of passengers from
Northern Ireland who use Dublin airport each year and, at the
same time, a smaller number of passengers from the Republic of
Ireland travel from Belfast airports. The extent of this 'leakage'
from Northern Ireland was an issue of concern in the Aviation
White Paper which estimated that it varied "between 0.2 and
0.6 million passengers per year although there is no firm evidence
of this and some believe that it could be as much as one million
passengers a year".
37. A consultant's report, commissioned by the Department
for Regional Development in 2001, estimated that 360,000 people
from Northern Ireland used Dublin Airport and about 100,000 from
the Republic of Ireland used Belfast airports, resulting in a
net leakage of 260,000. However, no studies have been carried
out since 2001 and no further estimates have been made.
The CBI claimed that Northern Ireland loses over half a million
passengers to Dublin airport and suggested that "Northern
Ireland has an opportunity to capture some of this market".
38. It was generally recognised that competition
between Belfast airports and Dublin Airport provided choice for
consumers, and overall this was seen as a benefit.
Nevertheless, there are undoubtedly significant economic benefits
for Northern Ireland, including the creation of substantial additional
jobs, if some of this market could be recaptured.
The CAA pointed out that "residents in Northern Ireland appreciate
the ability to fly from Dublin to destinations which may never
be viable from Belfast and which save them the inconvenience of
having to take a feeder flight to London",
while the General Consumer Council argued that "it is competition
both ways and Belfast, in terms of its two airports, has to offer
alternatives if it is to attract people in the opposite direction".
39. The introduction of the Route Development Fund
was described in the White Paper as "a potentially significant
policy response" to the issue of cross-border leakage,
but the Department for Transport admitted that it did not know
whether this has had any impact and suggested that it "needs
to be monitored carefully".
The Minister told us that the impact of the Route Development
Fund was "very much about building the critical mass of the
40. In addition to the extensive range of direct
services available from Dublin, many respondents highlighted other
factors which encourage Northern Ireland passengers to use Dublin
Airport. These include the recent road improvements that have
reduced travel time between Belfast and Dublin, and the absence
of any air passenger tax in the Republic of Ireland.
41. The key priority for Belfast International Airport
in reducing the trend towards Dublin airport was the removal of
the airport departure tax.
From a business perspective the CBI also argued that these tax
differentials "provide important cost advantages in markets
which are increasingly price sensitive".
Belfast International Airport provided anecdotal evidence that
the airport tax was the crucial factor that persuaded groups from
the United States to opt for Dublin Airport rather than Belfast.
However, the Department for Transport remained to be persuaded
that the tax issue "makes a huge amount of difference".
Some also cited the situation in the Scottish Highlands and Islands
where flights from those airports are exempt from Airport Departure
42. We recognise
that Dublin Airport, for a variety of reasons, including in particular,
the range of direct services it has to offer, will continue to
attract significant numbers of passengers from Northern Ireland.
Steps should be taken to keep this 'leakage' to a minimum for
the overall benefit of the Northern Ireland economy. In the absence
of reliable and up-to-date information on passengers from Northern
Ireland who use Dublin Airport, and vice versa, we believe it
will be impossible to measure the impact of any policy measures
aimed at addressing the issue.
43. We call on
the Minister for Regional Development to commission an urgent
study to determine the number of passengers from Northern Ireland
who use Dublin Airport and those from the Republic of Ireland
who use the Belfast airports, and, equally important, to carry
out a detailed analysis of the factors which influence those decisions.
Following this, we urge the Minister to consider what further
steps can be taken to improve the competitiveness of Belfast airports
and to reduce the flow of passengers to Dublin. We also urge the
Minister to pursue with the Treasury what measures can be taken
to address the impact of the significant tax differentials between
Northern Ireland and the Republic of Ireland.
71 The Future of Air Transport, Department for
Transport, December 2003, Cm 6046, Chapters 7.3.1, 7.3.11 Back
Qq 283-284 Back
Q 12 Back
Q 409 Back
Ev 7 Back
Q 118 Back
The Future of Air Transport, Department for Transport,
December 2003, Cm 6046, Chapter 7.3 Back
Qq 347-348 Back
Q 434 Back
Ev 151, Ev 5, Ev 156 Back
Qq 388-389 Back
Ev 105 Back
Q 409 Back
Q 349 Back
Ev 125 Back