Ministers have defended the island’s airport passenger duty charges, saying it is in line with those charged in the UK.
The Chief Minister was answering questions about easyJet cutting its Belfast route from later this month, with it blaming APD.
CoMin was told of the risk of easyJet cutting its Belfast route in August, with former airport director Gary Cobb revealing at the Government Conference that the airline had blamed the APG for this.
Mr Cobb told the conference that the rates of APD charged by the Isle of Man was the key reason the airline had pulled both the Belfast and Bristol routes.
Addressing the issue in Tynwald this morning, Mr Cannan said: “It is important to note that decisions on routes are commercial decisions for airlines themselves, with both air passenger duty, and demand of course, being important factors in their considerations.”
Taxes
Jason Moorhouse (Arbory, Castletown and Malew) said that in some cases, the tax charged can be over 100% of the airline’s basic price.
He said: “In terms of the Logan Air flight at the end of December, you can go to Ireland for £63. The problem is, we add in the tax, it becomes £148.44, a massive 132% more.
“That’s the issue in terms of individuals making choices about travel, about relocating on to the island, and other things in terms of that situation, have the Council of Ministers actually considered this as being a key issue that local people and people coming to the island are actively thinking about?”
Mr Cannan replied by outlining that the government and Tynwald has supported underwriting some strategic air routes.
He added: “As I said, various airlines have different policies as well, which may impact on matters.
“But what I do know is that we are fairly consistent with our air passenger duty in terms of the charges that are being applied for the Isle of Man, and that they are relatively consistent with what is being applied across the UK.”
Visitors
Asked by Mr Moorhouse whether the island should properly consider what impact APD has on visitor numbers and residents, Mr Cannan said: “I think all these matters do need proper examination, but I would point out that there is a variation between the airlines and EasyJet, for example, will only show the air passenger duty element, and they make a statement about never passing on airport charges.
“Clearly the way that they present their versus how Logan air present their charges are different. And of course, we move on beyond when we look at the tax element.
“Of course, the variation between what is air passenger duty and what other charges are incurred through airport fees that may be charged either for security or for baggage handling, for example.”
Mr Cannan also said even if the island cut APD, there is no guarantee this would be passed on to passengers.
Dr Alex Allinson also said that the “air passenger duty charged leaving the island is exactly the same time, same rate as the air passenger duty charged by the United Kingdom government for arriving on the island” and that there were other factors to consider.
The UK and the Isle of Man both charge £13 passenger duty for flights under 2,000 miles.
However, Jersey and Guernsey have a zero rate and the UK had halved its APD duties for domestic flights. The Republic of Ireland has a zero rate of APD with the Scottish Government seeking to reduce it and possibly abolish it.
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