Major airlines have told Scotland’s busiest airports that the nation is losing out on better connections due to the burden of Air Passenger Duty, it has been claimed.
Edinburgh chief executive Gordon Dewar and Glasgow Airport managing director Amanda McMillan said talks with would-be carriers had already revealed how Scotland was losing out on new options.
They were joined in condemnation of the charges by Aberdeen Airport boss Carol Benzie, Scottish Chambers of Commerce policy chief Garry Clark and Scottish Transport Minister Keith Brown.
“We’ve had a successful year at Edinburgh Airport but it is clear from our discussions with our airlines that Scotland could be far better connected without the iniquitous yoke of APD,” Mr Dewar said.
“It puts our country and importantly our vital tourism industry at risk. People and airlines will go elsewhere.”
APD will rise on medium and long-haul flights from April, after Chancellor George Osborne left unchanged his plans for an increase during last week’s autumn statement at Westminster despite extensive lobbying from the industry.
Mr Clark said his organisation would redouble its efforts to persuade the UK Government of the case for “abolition, reduction or, at the very least, devolution of these taxes.”
“At a time when other countries are abandoning Air Passenger Duty, the UK continues to increase what are already the highest such taxes on the planet,” the Scottish Chambers’ head of policy and public affairs said.
“The fact is that this tax is holding our businesses and our airports back and is having a negative impact on both international trade and our tourist industry.”
Ms McMillan said aviation had a “critical” role in supporting the growth of the UK economy.
“Travelling by air is not a luxury but an essential element of business and family life, yet we continue to have the highest levels of taxation in the EU,” she said.
“APD is already proving a significant barrier to attracting new routes and unless there is a fundamental re-think, I have no doubt that Scotland’s domestic and international connectivity will suffer.”
Mr Brown said the UK Government had failed to act on a Calman Commission recommendation that APD, which puts Scotland at a “competitive disadvantage”, be devolved.
“A recent study by York Aviation estimated that APD will cost Scotland more than £200 million a year in lost tourism spend alone by 2016,” he said.
“In addition to the direct losses to the Scottish economy, a report earlier this year by PWC showed that reducing APD would increase other tax receipts, such as VAT.”