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Airlines and airports welcomed the Scottish government’s consultation on a Scottish replacement for Air Passenger Duty (APD) published on Monday.
The Board of Airline Representatives in the UK (Bar-UK), representing 70 airlines, said it supports the Scottish government view that APD is an uncompetitive tax which is holding back the economy.
Bar-UK chief executive Dale Keller said: “The Scottish government is leading the way on tackling this punitive departure tax, and by doing so sending a strong message to the chancellor ahead of his Budget on Wednesday.
“If it makes sense for Scotland to consult on the best ways to reduce and then scrap this tax, then it’s most surely time Westminster does the same.”
British Air Transport Association (Bata) chief executive Nathan Stower agreed, saying: “This is a significant step towards the abolition of APD in Scotland.
“The Scottish government recognises that UK APD is holding their economy back. Reducing the tax by 50% as a first step would make a big difference to businesses and families.
“We urge that the reduction be implemented in full in 2018 to maximise the impact and benefits of the change.”
Stower added: “Devolution will have knock-on consequences for airports in northern England as passengers travel across the border to pay less tax. We look forward to its full abolition as soon as possible.”
Airport Operators Association chief executive Darren Caplan said: “The Scottish Government has been doing all the running on this issue for a long time now and ministers in Westminster need to acknowledge their failure to respond has created a lot of uncertainty.
“Scottish Ministers have been clear they will start to reduce APD by 50% in 2018.
“Given the Treasury’s own analysis suggests such a move will create a competitive distortion and damage airports in other parts of the UK, we desperately need the Chancellor to respond to his own discussion paper on this matter – itself well over 6 months old – and offer reassurances that a cut anywhere in the UK should be matched immediately by a cut everywhere.”
EasyJet UK director Sophie Dekkers pledged to raise capacity from Scotland by 30% if APD is halved.
She said: “EasyJet has long campaigned for the removal of Air Passenger Duty. We know that its impact is most keenly felt in Scotland where passengers flying to and from other parts of the UK pay £13 on each flight.
“We strongly welcome the Scottish government’s commitment to halve the tax for passengers. They have rightly recognised that cutting the tax will boost tourism, investment and business activity in Scotland.
“Research by PwC has shown that abolishing APD would have a positive effect on jobs and growth, as well as public finances in the longer term. So it is important that the cut takes effect in full in 2018, so that the benefits for Scotland are felt as quickly as possible.
“To achieve a step change in connectivity for Scotland, by airlines adding new destinations and extra flights, there also needs to be a step change in the taxation. A single 50% cut is the way to deliver this. Too small a change risks not attracting the extra aircraft and new routes to Scotland.
“If there is a 50% cut in 2018 we would expect to increase our flights to and from Scotland by around 30%.
“EasyJet is proud to be Scotland’s largest airline and this would mean the current 5.5 million passengers we carry each year could increase to over 7 million.
“This would deliver more services and routes for passengers in Scotland, including to European cities without a current direction connection, as well as the economic benefits of a larger easyJet operation in Scotland.”
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