Northern Ireland

Papers reveal United rescue deal unease

A United Airlines plane Image copyright United Airlines
Image caption A rescue deal worth £9m was agreed to stop United ending its daily service between Belfast and New York

BBC News NI can reveal more about unease in the Department for the Economy over a £9m aid plan for US airline, United.

The deal was intended to save the daily service between Belfast and New York.

However, it fell through because the package breached EU state aid rules.

BBC News NI has seen correspondence that shows Economy Minister Simon Hamilton was at one stage informed the deal was not considered affordable in the prevailing financial climate.

The department's permanent secretary, Andrew McCormick, also warned there was "no realistic possibility of demonstrating value for money", but Mr Hamilton overruled him.

'Bad precedent'

Mr Hamilton argued that saving the New York-to-Belfast service was necessary as the route was beneficial to trade and tourism.

However, correspondence between the minister and Mr McCormick, seen by the BBC, provides further details of the significant level of nervousness within the department.

Mr McCormick wrote the deal "would not likely be approved in any conventional context".

He also noted United would not allow monitoring of its need for support and that it could seek even more cash further down the line.

He further stated other airlines may seek support for routes on learning of the deal with United and the European Commission would "clearly be concerned this may set a bad precedent".

A departmental options paper has also been seen by the BBC.

Executive refunded

It points out that doing nothing - and allowing the flight to be lost - "could be viewed as being as a direct result of the the UK decision to leave the EU".

The DUP backed Brexit during the referendum.

The deal agreed in August was for United to receive £3m a year for three years to maintain the route between Newark and Belfast International.

Invest NI would pay around two thirds, with the remainder coming from Belfast International.

United gave the executive a refund after it became clear the deal could not go ahead.

Mr Hamilton acted urgently on being informed United was on the verge of pulling out last June and had executive approval for his actions.

In a statement, Mr Hamilton told BBC News NI: "Given the serious time constraints placed upon us by United it was not possible to show value for money through a business case.

"That however does not mean that value for money could not have been shown had a business case been developed."

He pointed out the deal involved the repayment of money "with interest" if it failed.

"In my view it was good use of public money because of the importance of the route," he said.

"Had I failed to support the fight I would have been rightly criticised."

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