SCOTTISH INDEPENDENCE: Newcastle International Airport said today “large numbers of passengers” from northern England would fly from Scotland if air passenger duty (APD) was significantly cut north of the Border.
Officials said the region would be at a “serious disadvantage” to Scotland if the tax was greatly reduced or abolished - either under independence or a further transfer of powers following the referendum.
Transport minister Keith Brown has said that immediate steps to be taken by the SNP if elected to run an independent Scotland would include halving APD “with a view to abolishing it completely”.
APD in economy class is currently between £13 and £97 per passenger, although this will be reduced to a maximum of £71 from next April.
It is understood that Newcastle’s long-haul passengers, who pay the most APD, would be the most likely to switch, such as from its route to Dubai.
The airport has 4.4 million passengers a year compared to nearly ten million at Edinburgh, its nearest Scottish rival, which is 105 miles away.
Some 3,000 people are employed at the airport and in associated firms, with around a further 4,000 jobs in the region depending on it.
Graeme Mason, its planning and corporate affairs director, said: “While Newcastle International does not take a position on whether the people of Scotland should vote ‘yes’ or ‘no’ in September’s referendum, we would like the UK Government to show it is aware of the potential impact that a reduction to APD in Scotland could have on the North of England.
“If APD in Scotland is abolished or significantly reduced, cheaper flights from Scottish airports will distort the market, resulting in large numbers of passengers from the North of England travelling across the border.
“This will reduce our connectivity and damage our economy.
“The UK Government should resist the inclusion of APD in a devo-max settlement either before or after the referendum.
“In the event of a ‘yes’ vote or the inclusion of APD in devo-max, we call upon the UK Government to match any reductions introduced in Scotland to avoid market distortion and an unfair economic disadvantage to the North of England.
“If they don’t do this, the North of England is going to be at a serious disadvantage to the rest of Scotland.”
Aviation expert John Strickland agreed some passengers could switch to Scottish airports.
The analyst with JLS Consulting said: “There is certainly an overlap in the catchment areas of Edinburgh and Newcastle.
“Customers will typically prefer to fly from their local airport, but when there is a big price differential, which could be the case if APD was reduced/cancelled in Edinburgh but not in Newcastle, a number of customers could switch their travel plans.
“This happened in Northern Ireland prior to APD reduction when it was cheaper to fly to the US from Dublin.”