Edinburgh Airport asks for earlier reduction of APD

Edinburgh Airport has urged the Scottish Government to act immediately and set a timetable for the reduction of Air Passenger Duty (APD), so that airlines and the tourism industry may plan for the change.

The push comes after a new report by the airport said that the promised 50% reduction in APD will create 3,800 jobs by 2020 and stimulate £200m of economic benefits each year. The report, produced in partnership with independent consultancy firm York Aviation, confirms the findings of previous studies that APD is a significant barrier to growth.

The airport’s chief executive, Gordon Dewar said: ‘We’ve long argued that APD is a tax on Scotland’s ability to compete with European airport of or size, and our economy is footing the bill in lost jobs and lost opportunities. It’s also damaging the ability for our passengers to travel and to take advantage of the amazing connectivity we have from Edinburgh.

‘Our report shows that the economic benefit of a reduction will outweigh any lost tax revenues. It’s therefore reasonable for passengers, airlines and the tourism industry to have some certainty on when this regressive tax will be reduced, and to know whether it will eventually be scrapped.’

The new report also claims that if APD is not reduced, Scotland will lose out on one million passengers a year and would cost the Scottish economy up to £68 million in lost tourism expenditure every year.

Mike Cantlay, Chairman of VisitScotland, said: ‘Scotland is a must-visit tourism destination and, every year, we welcome millions of visitors from all over the world.

‘There is no doubt, however, that Air Passenger Duty is acting as a major deterrent to many potential visitors. Few other EU countries levy APD, so this places Scottish tourism at a competitive disadvantage.

‘We are pleased that, as of May, APD will no longer apply to under 12s and that fiscal authority for APD will ultimately be transferred to the Scottish Government, as recommended by the Smith Commission.’

 

Air tax damaging to the UK economy

Removing Air Passenger Duty would result in an additional 91,000 British jobs being created and £4.2 billion added to the economy in 12 months, it has been revealed.

The research, by World Travel&Tourism Council (WTTC), shows that comes as Britain is about to face yet another rise in Air Passenger Duty. Increases planned from April mean a family of four flying to Malaga will pay £52 extra on the price of their tickets. This rises to £260 for the same family to fly to Florida and £368 to fly to Australia.

David Scowsill, WTTC President&CEO, said: “Air Passenger Duty is a completely disproportionate tax on people’s holidays and is hitting business travel hard. When the economy needs help, it is economically illogical to continue with a tax that costs the country some 91,000 jobs and as much as £4.2 billion.”

In the next 12 months, the UK government will collect £2.8 billion in extra tax from air travelers, far more than any other country in the world.

David continued: “Travel and tourism grew by 4.1 percent in the UK last year, but is forecast to slow to 1.3 percent in 2012. This slowdown is partly due to the impact of Air Passenger Duty, which is dampening demand.

“This tax is damaging the economy at a crucial time and is having a negative effect on trade with countries in the Caribbean, Africa, and Asia. We urge the UK government to recognize the impact on the overall economy and reduce Air Passenger Duty.”

Martin Craigs, CEO of the Pacific Asia Travel Association (PATA), said: “The UK is an island trading nation; air services are the vital lifeblood of modern global commerce. The UK Air Passenger Duty is now the world’s highest by a wide margin. It is certainly turning away tourism and trade from the world’s fastest-growing economic region, Asia Pacific.

“Airport Passenger Duty started in1994 at £5 and some worthy intentions to offset aviations carbon footprint. Today at £85 to zone D (Asia/Pacific) it’s a ‘detention tax’ that’s restricting job growth, alienating important trade partners and not being transparently directed to green projects. Airport Passenger Duty maybe easy to collect but it’s also easy to see its macroeconomic damage.”