31/7/23 Today, led by the UK Travel Retail Forum, the three major airports in Northern Ireland are
31/7/23
Today, led by the UK Travel Retail Forum, the three major airports in Northern Ireland are uniting to call on the UK Government and the European Commission to return duty-free for flights from Northern Ireland to the EU.
The UK formally left the EU at the end of the transition period on 31 December 2020. From January 2021, duty-free shopping from GB airports was extended to include EU destinations. This facility was not extended to Northern Ireland’s airports. The reason given at the time was the ongoing discussion with the EU on implementing the Northern Ireland Protocol.
With the agreement of the Windsor Framework, Belfast International, Belfast City and the City of Derry believe it is time to correct this anomaly and return duty-free facilities to Northern Ireland’s airports.
Duty-free sales account for over £900 million in GDP to the UK economy,1 supporting local economies and jobs and generating significant non-aeronautical revenue for airports. Non-aeronautical revenue can account for as much as 40 per cent of the total revenue of an airport,2 and smaller regional airports can be particularly sensitive to it, as it supports reinvestment, capital expenditure and permits new route development (in turn generating further aeronautical revenue).
The inability of Northern Irish airports to sell duty-free to passengers travelling to either GB or the EU is already resulting in an estimated £5 million loss each year to regional Gross Value Added.3 Given the Northern Irish economy is comparatively smaller in size, this loss continues to be substantial.
The issue also has a knock-on effect on Northern Ireland’s growing food and drink sector, as the absence of duty-free facilities closes potential markets for these goods. Enabling duty-free would showcase these products to a new international customer base and deliver real economic growth beyond the airports.
The agreement of the Windsor Framework in February of this year marks a significant improvement in the relationship between the EU and the UK. One of the key stated aims of the agreement was to protect Northern Ireland’s place within the UK. Another was to deliver real economic benefits to the people of Northern Ireland. Returning duty-free facilities to Northern Ireland’s airports would deliver on both of these aims. It would put Northern Ireland’s airports on an equal footing to other airports in the UK, and deliver real economic benefits in terms of income generated by the airports, jobs creation, improved connectivity due to potential additional flights between NI and EU countries, as well as boosting the food and drink sector in NI by creating a showcase for local products.
Far from giving Northern Ireland “the best of both worlds” – as UK Prime Minister Rishi Sunak declared the Windsor Framework – the current situation leaves it uniquely disadvantaged, with the only airports in Europe without duty-free facilities.
The three airports, and the wider travel retail industry, are calling on the UK Government and the EU Commission to use the mechanisms under the TCA and the Windsor Framework to find a solution to this problem and make this the last summer when passengers from Northern Ireland are the only ones in Europe unable to access duty free.
Nigel Keal, Chairperson of the UK Travel Retail Forum, who is coordinating today’s call to the UK Government and EU Commission, said: “The return of duty-free post-Brexit has proven incredibly popular with consumers, with overseas retailers seeing significant increases in sales of duty free goods to departing UK passengers. This has been a crucial financial support as the aviation and travel retail sectors recover from the COVID-19 pandemic. Preventing airports and businesses in Northern Ireland from accessing this revenue stream is unfair. It puts them at a competitive disadvantage to the rest of the UK, and to the rest of Europe.
“On behalf of the industry, the travel retail industry is calling on the Westminster Government and the EU Commission to work together to level the playing field and bring the rules on duty-free at Northern Irish airports in line with rules at their British and European counterparts.”
Graham Keddie, Managing Director at Belfast International Airport, added: “It is critical that the UK Government and EU move quickly to restore balance, equality and fairness for the people of Northern Ireland as we are currently left with the worst of both worlds.
“We have raised this matter directly with HM Treasury, the Cabinet Office and the Northern Ireland Office as well as our local political parties. It is simply indefensible that the millions of passengers travelling through our airports are placed at such a significant disadvantage to those travelling through GB or RoI airports. This is costing millions of pounds in lost sales and is impacting employment and investment opportunities. We urge the UK Government and EU to sort this issue out as a matter of urgency as there can be no credible or justifiable reason for not doing so.”
Agreeing, Steve Frazer, Managing Director at City of Derry Airport, said: “Excluding Northern Ireland’s airports from duty-free shopping further erodes our ability to offer attractive and competitive options, which the modern traveller expects. Our three airports combined growth has slowed significantly while competing with zero air passenger duty (APD) across the rest of the island’s airports, many of which have thrived through supportive policies conducive to economic growth.
NI’s exclusion from the advantages of duty-free enjoyed in our neighbouring ports and airports adds to that already uneven playing field. We would request a collaborative review to remove yet another competitive disadvantage for our industry, considering our unique geography and the economic potential associated with visitors to our region.”
Katy Best, Commercial Director at Belfast City Airport, added: “Duty-free shopping is a huge asset for many passengers to look forward to when travelling. By denying Northern Ireland duty free shopping status NI passengers and visitors are being denied the same opportunity as elsewhere in GB and the Republic of Ireland. Also, businesses and airports like Belfast City are being denied the opportunity to deliver key revenue which underpins continued investment in access and employment.
“Though we are sure this was not the intention of the Windsor Framework, we would urge its authors to work with industry to resolve this important issue.
Footnotes
1. York Aviation, 2023
2. Airports Council International (ACI), 2022
3. York Aviation