Scottish airports raise APD fears
17.02.11
Scotland's three BAA owned airports have said a rise in air passenger duty (APD) wil reduce traffic by a million passengers over the next 3 years. Edinburgh, Aberdeen and Glasgow airports commissioned a report that suggests the loss of passengers could cost Scotland up to £77 million by 2014. They have called on the Government to rule out future air tax increases.
APD was first introduced in 1994 at £5 for European destinations and £20 elsewhere. The most recent increase in November brought the rate for a European destination to £12 and £85 for elsewhere. The duty on a long-haul flight in business class is now £170 and the tax raises almost £3 billion a year. UK aviation tax rates are the highest of any major European country and are forecast to rise further under proposals in the Coalition Government’s budget.
The report suggests Scottish airports could lose 1.2 million passengers during the next 3 years, including about 150,000 inbound international visitors. Domestic routes are likely to be hardest hit, losing almost 500,000 passengers, while the long-haul market could fall by as much as 5%. A drop of this scale would undermine the viability of some routes, and seriously harm the prospects of further route development.
The survey, carried out by industry analysts York Aviation for airport owners BAA Scotland, compared the UK with the rest of Europe, where Ireland, Spain, Denmark and the Netherlands have reduced or abolished aviation duty in order to boost air travel. Amanda MacMillan, managing director of Glasgow Airport, said: ‘Scotland needs a thriving airline industry if it is to compete in Europe. Quite simply, if it is too expensive to fly to Scotland, tourists and airlines will go elsewhere.’
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