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".[71]

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.[72] 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.[73] 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.[74] 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",[75] 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".[76]

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,[77] 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".[78] The Minister told us that the impact of the Route Development Fund was "very much about building the critical mass of the airport".[79]

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.[80]

41. The key priority for Belfast International Airport in reducing the trend towards Dublin airport was the removal of the airport departure tax.[81] From a business perspective the CBI also argued that these tax differentials "provide important cost advantages in markets which are increasingly price sensitive".[82] 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.[83] However, the Department for Transport remained to be persuaded that the tax issue "makes a huge amount of difference".[84] Some also cited the situation in the Scottish Highlands and Islands where flights from those airports are exempt from Airport Departure Duty.[85]

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.

72   Qq 283-284 Back

73   Q 12 Back

74   Q 409 Back

75   Ev 7 Back

76   Q 118 Back

77   The Future of Air Transport, Department for Transport, December 2003, Cm 6046, Chapter 7.3 Back

78   Qq 347-348 Back

79   Q 434 Back

80   Ev 151, Ev 5, Ev 156 Back

81   Qq 388-389 Back

82   Ev 105 Back

83   Q 409 Back

84   Q 349 Back

85   Ev 125 Back