£9 million on a single flight, most of it from Stormont

Without too much fanfare, during the summer recess it was announced that United Airlines had been considering withdrawing the Belfast International – Newark route from service. The airline had previously made a decision to cancel the route from January to March of 2015.

Discussions took place between United Airlines, Belfast International Airport officials, the British Government and the NI Executive and the decision was made to retain the route, at least for the next 3 years.

As the Irish News reported at the time though, this route made a profit for the airline and the suggested cancellation was to allow the United to move the aircraft capacity to more profitable routes. There was a previous attempt to save such airline services by the Executive by removing Air Passenger Duty from long-haul flights.

A £9 million ‘aid deal’ was swiftly put together by the NI Executive, despite concerns about value for money being expressed by Andrew McCormick, Permanent Secretary at the Departent for the Economy.

£6 million of the aid deal for United Airlines to keep the flight operational will come directly from the Department for the Economy budget.

Lagan Valley MLA Trevor Lunn criticised the decision,

This move by the Executive is an act of madness, for the Department to consent to giving millions of pounds to United Airlines each year in the absence of any detailed business case is breathtaking, particularly when it appears to have disregarded the concerns of the Permanent Secretary.

There remains no guarantee United will even stay beyond those three years. The Executive has effectively promised this money without any proper scrutiny in place and questions need asked.

That so much money was budgeted to essentially pay an airline to keep a route going which is already making the company profit, is a matter that deserves questions to be asked of it.

If the Executive wished to maintain an air route between NI and the USA, should there have been a competitive tender process before giving over such a large sum of public money?

Is this potentially giving licence for any airline running a route deemed by the Executive to be important, to hold the Executive to ransom in order for the route to continue, despite its profitability?

Despite the route being profitable and this ‘aid-deal’ coming from public funds, there is no indication that fares will be decreased whatsoever. 

This is the kind of issue that Opposition parties should thrive on – scrutinising public spending.

At the time, Danny Kinehan MP of South Antrim said of the deal,

This is an excellent example of what can be achieved when political differences can be put aside.

Economy Minister Simon Hamilton said,

It is public money being spent to ensure we keep this very important route in place.

 

 

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  • OneNI

    Unbelievable. Dublin is the fourth or fifth biggest airport in these islands with particularly strong links with the USA. Most of NI pop lives 1.5 hours away….
    Even madder the Executive has agreed to throw more millions at the City of Derry airport. An airport which even its own Chairman Roy Devine appeared to admit on GMU the other day may not have a long term future once the A6 is built.
    Look at the CAA figures the idea of Belfast competing with Dublin is laughable and the idea of Derry surviving even more ridiculous

  • murdockp

    Total bonkers. Shut down international and expand city and lets build a world class airport.

    Then the United flight might stand a chance of success.

    £9m of taxpayers money is the money collected from 2,500 households.
    It really does sum up the contempt in which the electorate are held.

  • Thomas Barber

    How and why are those fools up on the hill so adept at throwing money at people they shouldn’t be throwing money at, from loyalist paramilitaries who’s thirst for more money will never be quenched to those roundabout community jobs that seem to revolve around the same people, different job descriptions but same successful applicants. Grants for burning wood on bonfires and now this absolute waste of public money. What value does the ordinary Joe Bloggs of Northern Ireland receive from this rip off I honestly wont be surprised in another few years if it emerges some people got back handed or some sort of quid pro quo was arranged for the few at the expense of the many.

  • hotdogx

    This is money that could have been spent to bring a certain currently mothballed railway to the airport!
    But hey railway closure is unionisims speciality. The entire north western network was closed due to the border & unionist divisionism, but hey that’s another story

  • Brendan Heading

    There is no “railway to the airport”.

    There is the Lisburn-Crumlin-Antrim line, which at this point likely requires full refurbishment which would cost well in excess of £9m. On top of that you would have to fund the extra services that would travel the route.

    There is no evidence that reopening the line and bringing it close to the airport would yield any traffic, as can be seen from the example of the city airport, which is a few hundred metres from a railway halt where there is a full passenger service, and yet there is no demand for a connection there.

  • Gaygael
  • Belfast Barman(ager)

    Quicker to drive. Factoring in check in and waiting around eating overpriced sandwiches and watching stag parties get lit…

  • OneNI

    In reality it is more sensible to shut Derry and the City

  • Declan Doyle

    Its the third biggest Airport after Heathrow and Gatwick, Expecting 25m passengers this year compared to 7m for Bel City and International combined.

  • Declan Doyle

    There used to be a Dub Bel hop on Fukker 50.

  • AntrimGael

    It’s another example of the crowd of amateurs up at the circus who make it up as they go along. It’s also another example of their hypocrisy and double standards. They tell us that the public sector is too big and they are slashing the life out if yet they are giving state intervention to a private company to suit their own egotistical agendas. What about the mantra of the private sector having to find it’s natural level WITHOUT State aid?
    The DUP and Sinn Fein have lectured us that they cannot keep sustaining the ‘bloated public sector’ as they call it yet they are pumping 9 million into assisting the profit margin of a private company? It was the same with the banks. They were bailed out on the point of collapse because of their own greed yet for decades state industries like coal, steel, transport were told that there could be no intervention to help them.
    The DUP and Sinn Fein are as cosy, wee cartel who are solely serving their own interests and they have one of the cushiest, private members clubs up at Stormont. They are accountable to NO ONE and govern with that knowledge. Just look at the likes of Nelson McCausland. His antics were totally torn to shreds by BBC’s Spotlight and he was castigated by a Stormont Committee yet he stays in office and not only that but he gets the Chairmanship of another Committee. You couldn’t make it up.

  • notimetoshine

    There is room of course for public subsidy of poorly profitable transport links when it serves an important need in a remote area. However I can’t see how this applies to either the united service or indeed to city of Derry.

    It should be simple to realise that trans Atlantic air travel is best served by Dublin airport with all its advantages. Improved transport links from the border to Belfast and the North west would be a far more useful way for these subsidies to make a difference.

    As for city of Derry. I don’t see that the airport has a long term future. Easy access to air travel would be only one of the many benefits of a serious infrastructure plan linking Derry to Belfast, and on to the border if Stormont would only get its finger out. Derry wouldn’t need an airport then.

    Once again Stormont’s short termism and sheer inability to strategically plan for the future is bared for all to see.

  • the rich get richer

    I suppose if you had to do a “runner”it would be hard for them to turn you down after that “nice little earner “

  • sadie

    abc

  • SeaanUiNeill

    “Quicker to drive.” And usually better company…….

  • Oggins

    If I remember correctly, it flys into Newark, which with the greatest respect is an out of town airport, prominently serviced by UI….

    So in short is the Ryanair model for international travel.

    Its a poor attempt by NI to show the world, we have our own international airport and connection to a hub in America.

    The fact thar DAR spent a small fortune on a new terminal a few years back, and we give 9mill to one firm, shows how bonkers our politics is.

    It smells of we cant be seen promoting or using ‘their’ airport. It will only encourage argument for future cooperation.

  • Am Ghobsmacht

    Apparently proposals to re-open a train station at templepatrick and to build a new one at Dunsilly Park & ride were knocked back due to lack of funding, yet another example of why there’s no cash for sensible things.

    Sod the airline (they’ll only do a runner eventually and Dublin is the Daddy airport any way) and use the money to open/reopen train stations along the commuter belts.

    While they’re at it they could expand the airport bus service to run to Antrim town, retail park and Dunsilly park & ride where it could meet up with the 212 and new train station; that way people could get from the airport to Ballymena, Ballymoney, Coleraine, Derry and most of the Glenshane area without having to trundle into Belfast or pestering a relative to pick them up.

  • Belfast Barman(ager)

    If they deemed it essential to have a USA flight, I wonder if another airline would have done it for less of a sweetheart deal

  • Oggins

    Probably not.

    We are on an island with an international airport (Dublin). We have paid a business that is making profit, £9million to keep their flights in the quiet period.

    This airline only flys to Newark from the airport. Dublin flies to most of the major cities in the USA.

    It is bonkers

  • Gwrinkle

    But on what else will sweet heart deals be stuck, if not on free handouts like this?

  • Ian James Parsley

    …is the biggest question of all here, yes.

  • On the fence!

    Errrr, presumably for as long as both sides insist on voting for them come election time!

    It’s not like they’ve been appointed without our consent.

  • Katyusha

    Out of interest, how does the subsidy to City of Derry airport compare to Ireland’s other regional airports, such as Knock, Kerry, Donegal, or even Shannon?

    Subsidising Derry to stay open or Aldergrove to keep transatlantic flights is ludicrous, but the ability to fly from Donegal to Dublin is one that really mystifies me.

  • On the fence!

    “and lets build a world class airport.”

    Absolutely, at Aldergrove.

    Plenty of room for expansion in every respect, as safe as any airport could ever be, close to road and rail for transport links, central location.

    No brainer!

  • WindowLean

    Yous don’t understand, our wee country has to have an international airport whatever the cost, ‘cos that makes it a country don’t you see? Payback is the Shinners “saving” City of Derry.

  • billypilgrim1

    But is there really any need for a “world class airport” in or near Belfast?

    There’s already a word class airport 90 minutes from Belfast. Why would we need another one?

  • anon

    The Yanks really know how to extract money from idiots.

    If you’re an American, 2 hours is a short drive. This is a country 3,000 miles wide. The flight will make f all difference to inward investment.

  • anon

    Expand City? F*** off. Clearly you don’t live in East Belfast. I’m surprised the kids over there get any sleep at all.

  • anon

    There’s also no evidence at all that the £9m cheque to United will bring any economic benefits to NI.

  • john millar

    I think you mean Fokker( or is there a “c” missing in you planes name)

  • john millar

    NI is afloat on a sea of public money from overstaffed over paid public servants to community activists and “friends of ” various clubs all sucking frantically on the tax payers teat. Fortunately its fairly small beer to the UK –

    Granny in London IS slowly waking up and is cutting the pocket money – not fast enough but its a start

  • Belfast Barman(ager)

    I’ve been making that point a lot lately.

    England has 1 major commercial airport for every 2.5million citizens, NI has 1 airport for every 600k citizens. And as someone on a facebook thread I was discussing this with pointed out, if you fly into Heathrow or Stansted, its an hour or more into central London, depending on whereabouts in the city you’re heading to. Why is the 75minute drive from BFS to Derry such a blocker to investment as those proponents of it are making out.
    Same with Dublin.

  • Belfast Barman(ager)

    payback? Because you think Sinn Féin weren’t in favour of United Airlines being given a wee gift?

  • billypilgrim1

    I honestly don’t know why anyone (other than United Airlines) thinks this is a good idea.

  • Belfast Barman(ager)

    Danny Kinehan of the UUP seemed to think it was. And I haven’t seen any comment from SDLP on the subject.

  • WindowLean

    Sorry didn’t mean that, I’m sure they were.

  • hgreen

    Nice little dig at the public sector there. As for as I’m aware united airlines aren’t part of the public sector. Loads of private organisations suck at the tax payer teat.

  • billypilgrim1

    It’s the why I don’t get.

    I guess the airport itself wanted to keep UA, and it’s in Danny Kinahan’s constituency, which explains his position.

    I just don’t understand what the objective arguments are (whether or not I’d agree with them) as to why this is a good idea.

  • billypilgrim1

    “As for as I’m aware united airlines aren’t part of the public sector.”

    They are now!

  • Belfast Barman(ager)

    Answers on a postcard…..
    If I was boss of Aer Lingus, FlyBe and all the other London-Belfast city hopper flights that are currently making a profit, I’d be floating the idea of pulling the routes ‘just because’ – if the going rate for keeping an NY route to BFS is £9m then Belfast – London must be well into 8 figures.

  • billypilgrim1

    A very good point. Have they thought through the moral hazard of this decision? Have they thought through the bargaining strength all the other airlines will have in the future, as a result of this?

    Losing the Newark flight wouldn’t really matter all that much, but imagine the bargaining power of companies that could threaten to cut Belfast-London flights.

  • sadie

    abc

  • Dan

    So, when it all goes tits up in a year or so at CIty of Derry and with United, will the fool responsibile for signing off the decision be held accountable for misuse of public funds?

  • On the fence!

    That, as I’m sure you are well aware, is a different debate altogether. In fact it wouldn’t take a genius to know beforehand what the two sides of the debate would be!

    I was simply saying that assuming their would be one in Northern Ireland, it’s a no-brainer where it should be.

  • On the fence!

    “The voters cannot not be held responsible,”

    Absolutely, so therein also is the solution. Forget about whether us’uns or them’uns have the biggest score at the next election and vote for someone who will make a better job of running the country.

    What do you think are the chances!

  • Ben De Hellenbacque

    The precedent has been set some time ago (Invest NI behaves similarly) and it shows our Exec as a bunch of profligate and desperate chancers. When Caterpillar receives subsidy to employ new admin staff only to lay off many more production line staff then Stormont is already known to be a bottomless source of condition free capital funding.
    Socialism for the rich multinationals, the struggle of free enterprise for the rest of us.

  • sadie

    .abc

  • billypilgrim1

    I’m really not aware that it’s a different debate altogether.

    How is it a different debate? It seems to me like a matter of the most obvious practicality.

    What are the two sides to the debate? On one side is practicality – what’s the other?

  • On the fence!

    I’m sure you know fine well what the other side is!

    However, whether you genuinely can’t see it, or pretend so as a sort of ridicule, makes little difference. It still illustrates the type of attitude which ensures we never really make any progress here and seem destined to continue that way.

  • On the fence!

    “what l meant was ‘the voters cannot be held responsible for the actions of the politicians they voted for'”

    Really?????? I would suggest that the DUP and Sinn Fein have had long enough in office by now that anyone who voted for them at the last elections should have known exactly what they were going to get.

    There are alternatives, the electorate have no excuse, if you want someone to blame for the state this wee country is in just go out for a walk/drive/whatever and look at the people around you.

  • billypilgrim1

    I’m trying to look at this as a matter of practicality. I’m trying to use common sense, rather than being sucked into the vortex of sectarian rivalry, so I kinda object to being accused of an “attitude which ensures we never really make any progress”.

    For what it’s worth, I think if I were to tiptoe respectfully around the utter lunacy of a “No Dublin Flights” position, that would be a great example of an “attitude which ensures we never really make any progress”.

  • On the fence!

    So you’ve no problem classing a “No Dublin Flights” policy as “lunacy” but are quite happy to float the proposition of NO international airport in Northern Ireland!

    You really can’t see how one-eyed that is????????

  • billypilgrim1

    Where did I say anything about having no international airport?

    The discussion here was about a “world-class airport”.

    I think what we need is a good regional airport (or two) for short hops to Britain, a few key locations in northern Europe, and summer package tours. That’s pretty much what Belfast, Cork and Shannon are, and I think we’re actually well-serviced by them. I also think we’re lucky to be so well serviced in our provincial airports (Belfast City, Derry, Donegal, Knock, Kerry).

    No-one needs Belfast to be an aviation hub to rival Dublin – we need it to be a strong regional airport that complements the existing hub 90 mins down the road.

  • On the fence!

    That’s fair enough, in fact I’d be mostly in agreement, it’s just not what I took from your original quip.

    Apologies if I misunderstood.