Scotland business

Scottish airports call for rethink on tax

aircraft in flight
Image caption Scotland's three main airports claim air tax duty is having an adverse effect on the industry

Scotland's leading airports are urging the chancellor to rethink a planned increase in Air Passenger Duty (APD).

The tax is due to increase by 10% in the budget later this month

The managing directors of Aberdeen, Edinburgh and Glasgow airports claim it will leave them at a disadvantage against their European rivals.

In a letter to George Osborne, they say: "In Scotland, we have particular concerns about our future ability to attract new airlines."

This was particularly true, they said, in an "intensely competitive global market".

They added: "There is a risk that airlines looking to serve new markets will choose other European countries at the expense of Scotland.

"This in turn will have a significant impact on employment, business competitiveness and inbound tourism."

The letter highlighted a report commissioned by airport operator BAA in 2011, which warned that further increases in APD could cost Scotland's airports about 1.2 million passengers over three years, with a loss of £77m in tourism revenue.

The number of passengers travelling through the three Scottish airports increased by 8.1% last year, with the airports collectively handling 19 million travellers.

Emirates airline recently announced that it will operate double daily flights from Glasgow to Dubai, and a new flagship service from Aberdeen to Frankfurt has been launched.

However, the airports warned that APD was "regularly cited as a barrier to growth" in discussions with airlines.

"Several airlines have made it clear to us that APD levels are simply too high to enable route development from Scotland to be commercially viable," they added.

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