Cut in passenger tax ‘would deliver £1bn boost’

Michael O'Leary said Ryanair would double the amount of passengers travelling in Scotland. Picture: Greg Macvean

HALVING air passenger duty (APD) would create almost 4,000 jobs and boost the Scottish economy by £1 billion over the next five years, a report commissioned by Edinburgh Airport revealed today.

The study, compiled by air transport consultant York Aviation, said that increased tourism spending and job creation would more than offset the £110 million that would be lost in tax revenue this year if the levy was slashed.

The Scottish Government has already committed to reducing APD by 50 per cent within the term of the next parliament after the Smith Commission recommended the levy be devolved to Holyrood, but Edinburgh Airport chief executive Gordon Dewar called for “certainty” on the timetable for change.

Dewar said: “We’ve long argued that APD is a tax on Scotland’s ability to compete with European airports of our 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.

He added: “Our report shows that the economic benefits 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.”

Ryanair chief executive Michael O’Leary last year said the Irish budget airline could double the number of passengers it flies in Scotland within two years if the country abolished the “penal” levy.

During a visit to Edinburgh, O’Leary said: “We’re working on a campaign with Edinburgh, Glasgow and Prestwick airports that says if APD is scrapped in Scotland we will double in size over a two-year period. So we would go from 3.5 million to 7 million passengers in two years, with 1.5 million more at Edinburgh, and one million more at Glasgow and Prestwick.”