Tax on air passengers ‘costs Scotland £210m’

By ALASTAIR DALTON
Published on 01/11/2012 10:19

SCOTLAND will lose two million passengers and £210 million a year in lost tourist spending because of air passenger duty (APD), Scotland’s three main airports claimed today.

Edinburgh, Glasgow and 
Aberdeen want the UK Government tax abolished, or at least frozen then reduced.

They expect it to be further increased in Chancellor George Osborne’s autumn statement next month. The airports, which collectively handle some 20 million passengers a year, said they would have secured key new routes, including North America, if APD had been lower.

The claim comes despite route expansion at all three airports since the last APD hike in April, such as a second daily Emirates flight between Glasgow and its Dubai hub, and EasyJet basing two extra aircraft at Edinburgh to serve six new European routes.

Research published todaym,l which was commissioned by the airports from consultants York Aviation, predicted the passenger and spending losses by 2016, on the basis of Treasury forecasts of rising receipts from the tax.

It highlighted that APD levels had been increased over the last five years for short-haul passengers by more than two-and-half times to £13. Long-haul rates have increased by up to four-and-a-half times to £92 for the longest trips, with those travelling in business or first class paying even more.

A family of four flying to Spain pay a total of £52 compared to £20 in 2007, and £260 to Florida, up from £80.

Edinburgh airport chief executive Gordon Dewar said: “The impact of this tax goes far beyond the boundaries of the airport, not just in Scotland but across the world. Airlines are telling us they are seeing it have an impact on passenger flows, which is ultimately having an impact on their decision making on where to put planes.”

Glasgow airport managing director Amanda McMillan said: “Due to the size of the market in Scotland, we will always find it difficult to attain and sustain new routes, and this situation is compounded even further by APD, which simply serves to artificially depress demand and dissuade airlines from basing aircraft here.”

Transport minister Keith Brown repeated his call for APD to be devolved, as it was in Northern Ireland a year ago.

Aviation consultant John Strickland said there was a case for different APD rates across the UK, which had been a key factor in United Airlines 
retaining its Belfast-New York route.

He said: “The further north, the greater sensitivity to price, particularly for leisure travellers.

“I wouldn’t be too optimistic of reform. There tends to be a more blinkered view of earnings for the Treasury from the tax without acknowledgement of the wider negative economic impact.

Dr Dan Barlow, head of policy for environmental campaigners WWF Scotland, said: “If the Scottish Government call for APD to be devolved is simply to enable them to increase flights, this would be a backward step for the environment.”