Rises in airport tax 'hit Scottish economy'

Transport Correspondent

Thursday 1 November 2012

SCOTLAND has lost 1.7 million air passengers over the past five years as a result of progressive increases to airport departure taxes that are causing long-term damage to the economy, a report commissioned by the country's three biggest airports has found.

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DAMIEN HENDERSON Transport Correspondent

The study by York Aviation warned that Air Passenger Duty (APD) hikes would see £210 million less spent a year in Scotland by inbound tourists, adding to pressure from business leaders and airlines to reform the tax.

The findings were leapt on by the Scottish Government, which has been campaigning to have responsibility over APD devolved from Westminster, promising to cut the rate in order to boost aviation.Passengers have seen increases to all bands of APD, which is paid on flights departing from UK airports, since 2007, with those travelling on long-haul services of more than 6000 miles seeing the biggest hikes. For a family of four flying to Florida in standard class, APD would have cost £80 before February 2007 but, after four increases, would now cost £260.However, the Treasury has disputed claims that it is hampering aviation growth in Scotland, insisting that passenger numbers grew at a faster rate than in the rest of the UK this year. Coalition ministers are thought to be sceptical about whether an independent Scotland would be able to afford a big cut in APD.Transport Minister Keith Brown said a decision to cut APD in Northern Ireland for long-haul flights showed that a "one size fits all" approach no longer applied across the UK, and that Scotland should be allowed to control the tax.He said:"The UK Government's APD is among the highest rate of aviation duty in Europe and it is making Scottish airports uncompetitive in the global competition for new direct air services."We are currently in talks with several international airlines in a bid to help attract new, direct services to our airports but APD as currently applied is acting as a disincentive."A spokesman for the Treasury said other tax breaks were available to air passengers, who were exempt from paying VAT and did not pay APD on flights between Aberdeen and airports in the Highlands and Scottish islands.

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Rises in airport tax 'hit Scottish economy'

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