The three 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.
Post-Brexit, the issue has been left unresolved by both the Northern Ireland Protocol and Windsor Framework, making the region the only part of the UK and only European country unable to offer duty free to passengers.
The UK formally left the EU at the end of the transition period on 31 December 2020 and from January 2021 duty free shopping from British airports was extended to include EU destinations, however, this facility was not extended to Northern Ireland's airports. The reason given at the time was the on-going discussion with the EU on the implementation of 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, supporting local economies and jobs, and generating significant non-aeronautical revenue for airports. Non-aeronautical revenue can account for as much as 40% of the total revenue of an airport, and smaller, regional airports can be particularly sensitive to it, as it supports reinvestment, capital expenditure and permits new route development.
According to the UK Travel Retail Forum, the inability of Northern Irish airports to sell duty free to passengers travelling to either Britain 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 is also having 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 show-case 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 benefit to the people of Northern Ireland. Returning duty free facilities to Northern Ireland’s airports would deliver on both of these aims
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, 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.
Graham Keddie, Managing Director at Belfast International Airport, said 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."
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 3 airports combined growth has slowed significantly while competing with zero air passenger duty across the rest of the island’s airports, many of which have thrived through supportive policies conducive to economic growth".
Katy Best, Commercial Director at Belfast City Airport, said 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 Britain 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."
