Last month, we reported that United apparently received a $12 million deal from Northern Ireland to keep its route between Newark and Belfast. United got the subsidy after attempting to cancel the flight in September 2015. While the route was technically profitable, they realized they could more efficiently use the Boeing 757 elsewhere.
Since it is the only regularly scheduled route between Northern Ireland to the US, Belfast worked hard to keep it. They essentially created a $12 million package for United; the deal involves removing the air passenger duty on that route, on top of a $180 per seat subsidy to United.
Well, it looks like United is going to cancel the route, after all. BBC News reports that United is canceling the New York/Newark-Belfast route, effectively January 10, 2017. This means the last flight to Belfast will depart Newark on January 8, and the final flight will depart Belfast on January 9. In a statement, United says:
We have regretfully taken this decision because of the route’s poor financial performance. We will contact customers with bookings for flights beyond those dates to provide refunds and re-accommodate where possible. We apologise for any inconvenience caused.
However, Belfast International Airport said the route is being canceled because the European Commission blocked the $12 million rescue package. In a statement posted on the airport’s blog, Managing Director Graham Keddie said that it was the EU that killed off the route (emphasis mine).
You could hardly get a worse example of process-driven madness. To block a support package for an airline that delivers direct access to the United States is almost beyond comprehension.
This is a vital link for business and losing it will be a body blow to Executive Ministers who use it to promote Northern Ireland to would-be investors from the United States. The adverse impact is all the greater, coming as it does ahead of the crucial decision to make Northern Ireland more competitive with reduced Corporation Tax designed to stimulate inward investment.
This is a bad day for the Executive and a bad day for Northern Ireland, which is still finding its feet after a generation lost to conflict. The United service was well supported and only recently carried its one millionth passenger. We have worked tirelessly to safeguard the service, but Brussels took a different view, believing the support package gave United an unfair advantage over services from elsewhere.
Apparently, only part of the $12 million subsidy was ever paid to United, which will now be refunded.