Consultation one: Policy for an overall 50% reduction in Air Departure Tax by the end of the current session of the Scottish Parliament
ABTA believes that high levels of Air Passenger Duty (APD) continue to inhibit the contribution of the travel and tourism sector to growth and employment, and are damaging the position of the UK as a hub for global air travel. This impact is particularly felt in Scotland, which is very reliant on air transport links and excellent global connectivity.
ABTA jointly commissioned a new report on Scotland’s air connectivity with Airlines UK, which found that Scotland had the highest air passenger tax when compared to 10 similar sized countries, only two of which levied APD and at a much lower rate than Scotland. The report also showed that Scotland could boost its air connectively, particularly direct long-haul connectivity, where it is seriously lagging in terms of the destinations served, should it adopt similar taxation regimes in the 10 countries assessed for the report.
ABTA therefore welcomes the Scottish Government’s policy plans for an overall 50% reduction in Air Departure Tax (ADT) by the end of the current parliamentary session. ABTA has continued to call for a reduction in tax on both short-haul and long-haul flights, as this would enhance Scotland’s air connectivity and global economic competitiveness, encouraging the establishment of new routes, and boosting business and leisure travel. However, ABTA understands that the Scottish Government is minded to reduce tax only on long-haul flights, freezing the rate for short-haul flights to better manage the estimated rise in short-haul traffic by 2020 for environmental purposes.
ABTA recognises and is mindful of the environmental implications of reducing ADT on short-haul flights. However, we would urge the Scottish Government, should it decide to freeze the rate on short-haul flights, to progress with a 50% reduction as soon as possible, given their economic value, and benefit to the Scottish economy of an increase in the volume of short-haul traffic. According to Transport Scotland’s ADT Emissions Impact Assessment published in June 2017, there were more than 12 million return journeys from Scottish airports in 2015, accounting for 94.7% of all flights from Scotland. A 50% reduction would see the number of return short-haul journeys increase by 9.4%2.
ABTA further welcomes the Government’s wish to continue working with Scotland’s airports fairly and equitably to ensure that the new competitive spirit amongst the airports is maximised and focussed for the benefit of the airlines and Scotland and, most importantly, for the consumer.