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Tax cut alone might not turn Prestwick around

The latest attack on air passenger duty (APD) from Ryanair boss Michael O'Leary is no more than might be expected from such a canny businessman.

Airlines have tended to absorb some of the impact of the tax on their flights out of the UK in order to remain competitive, so its abolition would be an obvious boon for them. That is not in itself an argument for doing away with APD, since all forms of transport are taxed.

It must be said that Ryanair is showing little sign of being dissuaded from operating out of Scotland in general, regardless of the existence of APD. True, Prestwick's share of the Ryanair cake has been cut, from 24 flights next summer to 16, but many flights have been migrated to Glasgow Airport. There will be nine flights out of Glasgow during summer 2015, as well as 32 out of Edinburgh.

Still, there is some justification in the claim that APD disadvantages regional airports, which lack the huge captive market of a Heathrow or a Gatwick. The Scottish Government and the airlines argue APD is doing damage to Scottish tourism and that abolishing it would increase the number of direct international flights to Scotland. If more airlines came here, goes the argument, there would be more competition for landing spaces, which would help underused airports like publicly owned Prestwick.

Abolition might well have a positive effect on traffic in and out of Prestwick, but that is only one of the challenges the airport faces. It is disadvantaged where business travellers are concerned by being less conveniently located than Glasgow or Edinburgh airports. Some 27 per cent of Ryanair's travellers fly with it on business. It is not hard to see why they might be more attracted by services straight to Glasgow; Prestwick has excellent transport links but is markedly further away from the city centre. Prestwick's folksy branding (remember "Pure Dead Brilliant"?) might not have helped.

Prestwick Airport is an important national and local asset. It generated £61.6 million for the Scottish economy in 2012 and supports 300 jobs directly and very many more indirectly. As a site, meanwhile, it has the longest commercial runway and parallel taxiway in Scotland, allowing for all types of aircraft to be accommodated, not to mention its own railway station, which neither Glasgow nor Edinburgh can claim.

So what next? The Scottish Government is due to publish a long-awaited report after the referendum on its plans for Prestwick, drawing on an expert evaluation of its viability. The Scottish Government believes the airport can be returned to profitability but the question is: how? Passenger services may be just one avenue of opportunity.

The Scottish Government is seeking the power to abolish APD, though doing so would jar somewhat with its hugely ambitious carbon emission reduction targets, which it has repeatedly missed.

Would such a move help Prestwick? Perhaps, but it seems unlikely this move alone would be enough to save this important local hub.

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