Air tax not held back Scots expansion say airlines

AIR passenger duty (APD) has not held back route expansion in Scotland, several major airlines have told The Scotsman.

Two Middle East carriers and Jet2 are amongst the airlines who have said air tax has not had an effect on expansion plans. Picture: Ian Georgeson

They include two Middle East carriers that operate daily flights, and fast-growing Jet2, which flies a total 44 routes from Edinburgh and Glasgow.

The revelation comes as ministers prepare to launch a consultation into cutting the tax when they gain control of it from Westminster.

This could raise questions over whether the effect of an APD reduction on aviation growth has been exaggerated.

Passengers pay £13 APD for flights from the UK of up to 2,000 miles, and £71 for longer trips. The Scottish Government plans to initially halve the tax before abolishing it altogether.

Ministers are expected to have to reimburse the UK Treasury for any cut in the £250 million of APD revenue raised annually north of the Border.

Transport minister Derek MacKay said earlier this week: “Gaining control of air passenger duty will be a huge opportunity to secure more direct flights to and from Scotland, boosting our international links, creating jobs and growing our economy.

“Our proposals will also lead to cheaper travel for passengers – and in the meantime we welcome all contributions as to how we can best use the powers over APD once we gain responsibility for it.”

However, Etihad Airways, which launched daily flights between Edinburgh and Abu Dhabi two weeks ago, said the tax had had no effect on its development plans.

Chief commercial officer Peter Baumgartner said: “APD is not something you lose too much time thinking about.”

Qatar Airways, which launched flights between the capital and Doha last year and subsequently increased them to daily, said APD had not influenced its plans.

It spokesman said there was “no link at all”.

He said: “Qatar Airways launched Edinburgh because it is an attractive city and there was good demand to fly to Doha and beyond from Scotland.”

Phil Ward, managing director of Jet2, said: “In a nutshell, APD hasn’t affected our plans.”

Jet2 has expanded from a single route at Edinburgh Airport ten years ago to 17 now, and that will increase to 26 next year.

It also operates 27 routes from Glasgow.

An environmental group urged ministers to reconsider cutting APD.

WWF Scotland director Lang Banks said: “The admission by these big players in the aviation industry that APD rates won’t affect their future plans should prompt the Scottish Government to stop and think about its plans to cut the rates.

“Ministers have admitted that halving APD would encourage more flying and increase carbon emissions by as much as 60,000 tonnes a year. This means that, if we want to meet our climate targets, any growth in emissions from the aviation sector will have to be offset by deeper cuts elsewhere in Scotland’s economy.”

Glasgow Airport said APD was hampering its expansion.

A spokesman said: “In recent years, we have been able to consolidate our position as Scotland’s principal long-haul airport, most recently with the addition of direct flights to Halifax, Nova Scotia.

“However, in our discussions with airlines, the issue of APD still remains a very real barrier to growth. We are competing in a global market and the fact the UK has one of the highest rates of aviation tax in the world means that, when faced with a choice, airlines will opt to place aircraft in countries that enjoy more favourable taxation policies.

“In 2013, Ireland scrapped its equivalent of APD. As a result, Dublin airport has enjoyed a marked increase in its international connectivity.”

On Tuesday, the Airport Operators Association said a survey of its members showed reducing APD should be one of the UK government’s aviation priorities.

The poll also found four out of five airports thought an APD cut would increase passenger numbers.