The BAA, owner of Glasgow, Edinburgh, and Aberdeen airports, has called for Westminster to surrender aviation tax control to Holyrood, the seat of the Scottish Government. The move, which has also drawn the support of Infratil, the company behind Prestwick Airport, would allow MPs to control the value of Air Passenger Duty (APD) in Scotland.
APD costs Scotland £77m in lost tourism every year, according to the BAA. The much-maligned tax has been criticised by Sir Richard Branson, Ryanair chief, Michael O’Leary, travel organisation ABTA, and “more than half” of all long-haul travellers, who say that APD will eventually make regular flights unfeasible. Adding to APD’s list of detractors are Thomson, Jet2, and UK flag-carrying airline, British Airways.
Jet2 boss, Philip Meeson, claims that the government is "hell bent" on ruining the summer holiday season for British travellers.
Critics believe that the Coalition doesn’t fully appreciate the impact of APD on the tourism industry or that the lucrative levy is blinding cash-strapped MPs to the consequences of heavy taxation. The latter point is perhaps best demonstrated via an article in the Independent, which notes that MPs have recently consulted on a further rise to APD. Scotland’s annual loses could potentially hit (and surpass) the £110m mark, if the motion is passed.
Edinburgh Airport chief, Kevin Brown, said that Scotland is not looking for an ‘easy ride’, regarding aviation taxes. “We are not saying we should not be taxed, only that any taxation is fair and proportionate." Mr. Brown’s counterpart at Glasgow Airport, Amanda McMillan, was concerned that APD could force airlines to spurn Scottish airports, in favour of hubs that are not subjected to the “continued rise in APD”, such as those in Holland and Belgium.
Scotland’s location in Europe means that air travel is particularly important in forging links with major economic centres on the continent, such as Brussels and Frankfurt. However, the country is presently losing millions of passengers to APD, alleged to be one of the highest transport taxes on the planet.
APD generates £2bn a year for Westminster. The figure could increase by 50% (to £3bn) over the next few years, if Virgin Atlantic chief, Sir Richard Branson is to be believed.