Gordon Dewar: Reducing APD is the right thing to do

Independently verified economic analysis shows that a 50 per cent cut to APD in one move will result in an additional 18 million passengers using Scotlands airports by 2021. Picture: TSPL

Like many people and businesses in Scotland, I have concerns about the impact of the Leave result that was delivered in last month’s European Union referendum. In spite of this, I remain positive about the continued success of aviation, tourism and business in Scotland.

Edinburgh Airport retains this positive outlook as we redouble our commitment to help our politicians understand how Scotland can create a fertile and globally attractive environment in order to allow businesses to flourish.

One of the boldest actions to ensure this competitive environment is recognised both at home and overseas is for the delivery of the Scottish Government’s proposed reduction of Air Passenger Duty (APD).

The UK has highest level of APD anywhere in the world. It is a tax passed on to passengers through their ticket price – which goes direct and in full to the Treasury.

Independently verified economic analysis shows that a 50 per cent cut to APD in one move will result in an additional 18 million passengers using Scotland’s airports by 2021. This will create nearly 10,000 jobs in Scotland, add more than £300 million Gross Value Added per year to the economy and generate a range of income revenue streams, including additional tax revenue, reduced benefits paid from new jobs, VAT from greater levels of spend and an increase in corporation tax from growing businesses. This can more than cover any initial loss in APD.

Reducing APD is the right thing to do for the health of the country’s connectivity. It would be a tangible demonstration of Scotland’s international ambitions and a warm welcome to visitors, whatever their purpose. It will also send a powerful signal to the global airline market that Scotland is most definitely open for business.

As we potentially face a new type of trade relationship with countries in the European Union, it is vital that our government uses the new powers at its disposal to reduce this regressive tax and deliver a measure which will give Scotland a competitive edge over the rest of the UK.

Edinburgh Airport is a very successful business and it will continue to be so regardless of any changes to Scotland and the UK’s constitutional relationship with the European Union. Our success is built on offering choice to our passengers and we are fully committed to delivering new routes to and from Scotland. However, not all airports in Scotland are enjoying such good times. Cutting APD would offer a vital helping hand to those facing challenges.

Much has been said about the growth of Edinburgh Airport. Offering choice is a key part of our growth strategy and it has enabled us to attract a record number of airlines serving a record number of destinations direct from Scotland. Growth however brings new challenges. We are currently engaged in a public consultation in the first stage of an Airspace Change Programme, seeking views on the potential impact of altering flight paths above Edinburgh and the surrounding areas to maximise operational benefits and minimise community impact. Our airspace was designed in the 1970s when our airport had around one million passengers per year. With the huge growth of air travel we now must modernise our airspace and the flightpaths that our airlines use.

The results will inform the development of viable flight path options which the airport will present and consult on later in the year. Please go to www.letsgofurther.com to have your say.

• Gordon Dewar is chief executive of Edinburgh Airport