A recent rise in Air Passenger Duty (APD) could seriously damage Scottish tourism, according to a report commissioned by the three largest airports in the country. The hubs, Edinburgh, Glasgow, and Aberdeen, anticipate a combined loss of 1.2m passengers by 2014, if the travel levy is not reduced.
Introduced in 1994, APD is calculated by measuring the distance travelled between two airports, and then comparing the data to a list of tax bands, designated A to D by increasing distance from London. Europe, for example, falls into Band A, and generally incurs the lowest APD of all destinations. The USA and parts of North Africa are in Band B, while locations in the Caribbean are placed in Band C. The most expensive bracket, Band D, includes countries situated over 6,000 miles away from the UK, such as Australia.
The APD on flights to Band A destinations stands at £12 for standard class, up from £5 in 1994. Whilst the duty fee might leave a bitter taste, the levy is unlikely to break the bank for most flyers. However, family groups on long haul trips from Scotland to Argentina (for example), could be forced to part with up to £340 in APD, depending on their choice of seat class. The British Airports Authority claims that the APD on Band C and D locations could force 5% of long-haul travellers to rethink their holiday plans.
Aberdeen Airport’s new boss, Derek Provan, is concerned that the November 2010 rise in APD could begin to impact ‘lifeline’ services provided by air to Scottish islands, destinations that are currently exempt from the levy. Mr. Provan’s counterpart at Glasgow Airport, Amanda MacMillan, is more concerned about the impact of APD on tourism, “quite simply, if it is too expensive to fly to Scotland, tourists and airlines will go elsewhere.” The two directors, alongside Edinburgh’s Kevin Brown, have called for ministers to rethink “further taxation” of the aviation industry.
In terms of numbers, the APD could cost Scotland £77m in lost tourism, equal to 150,000 fewer international visitors a year. Domestic routes could also lose half a million people within the next three years.