Scotland’s business leaders called on governments in Westminster and Holyrood to “get their act together” over aviation taxes and strategy as regional carrier Flybe confirmed it was selling rights to operate flights to and from London Gatwick.
The troubled budget airline whose £20 million sale of landing slots to rival easyJet has raised fears over Scotland’s links to the rest of the UK and major international hubs said it faced an unsustainable burden of charges at Gatwick, and had been forced to stand aside by discriminatory pricing and “penalistic” rises in domestic air passenger duty.
The sale immediately cast doubt on the future of flights between Inverness and London services used by Chief Secretary to the Treasury and Lib Dem MP for Inverness, Nairn, Badenoch and Strathspey Danny Alexander.
Scottish Chambers of Commerce chief executive Liz Cameron said her fears and warnings over the duty had “proved to be correct” and that action was required on both sides of the border.
“Rather than pander to the self-interest of politicians representing constituencies in and around London, it is high time that the UK Government grasps the nettle of aviation and acts now to eliminate APD and to allow the UK’s airports to invest and develop to meet the growing demand from business and the travelling public alike,” she said.
“Here in Scotland, the Scottish Government needs to get its act together, too. For months we have been promised a new air route development fund for Scotland, but ministers have dithered and procrastinated and nothing has yet been delivered.”
Her calls were echoed by Amanda Frazer, chairwoman of the Highlands and Island region of the Federation of Small Businesses.
She said connectivity was of “critical importance” to the prosperity of the area, and by the Scottish Council for the Development of Industry.
Confirmation of the sale of 25 pairs of arrival and departure slots came as Flybe announced it had made £30m in cost savings against a £25m target. A total of 590 jobs have been cut, and more are at risk after the firm announced an additional £23m annual target for further savings.
Flybe said cash from the sale would be used to reduce debt and fund restructuring. Partner Loganair scrapped its Flybe-badged flights from Dundee Airport late last year, after struggling to make its Birmingham and Belfast services profitable.
“The decision to sell the slots follows a discriminatory pricing regime applied by the airport’s owners to the operators of smaller, regional aircraft which, in Flybe’s case, has resulted in a 102% increase in charges over the last five years,” Flybe said yesterday.
It added that the increase had created a significant cost-per-seat penalty in comparison to larger carriers.
“It is the view of the board that the increase in charges, combined with the penalistic levels of APD imposed on UK domestic airlines by successive governments . . . resulted in Flybe’s services to and from Gatwick becoming unsustainable in the long-term.”
easyJet already operates flights between Inverness and London, and it is feared the slots’ new owners will not retain the same level of service from March next year.
A spokesman for the Scottish Government last night said Transport Minister Keith Brown had requested an urgent meeting with easyJet’s chief executive to discuss how the link between Inverness and Gatwick could be secured.
“This situation underlines precisely why we have been calling for APD to be devolved as soon as possible, just as it has been in Northern Ireland, so that we can provide a regime that makes Scotland more competitive,” Mr Brown said.