Scotland business

Airport boss raises Brexit and tax concern

Edinburgh Airport
Image caption Edinburgh Airport saw one million passengers passing through its terminal in March

The boss of Scotland's busiest airport has said the industry is currently "not a comfortable place to be", because of high taxes and Brexit uncertainty.

Edinburgh Airport chief executive Gordon Dewar said he was expecting a solid summer, but insisted the Scottish government must cut air passenger duty.

He also said certainty over the UK's deal for leaving the EU was needed so airlines could invest confidently.

Government plans to cut air passenger duty have been hit by legal issues.

Scottish ministers want to replace the tax with an alternative, then cut it by 50%, before eventually scrapping it completely.

'Brexit uncertainty'

But in 2017, they said plans to continue exempting journeys from airports in the Highlands and Islands required EU approval under state aid rules.

Edinburgh Airport has just announced that one million passengers went through the terminal last month - a first for the month of March.

Mr Dewar told the BBC's Radio's Good Morning Scotland programme: "We've got particular issues in the UK with all of the uncertainty around Brexit and on top of that we've got the highest taxation anywhere in the world.

"What we're hearing from airlines is that, as belts need to be tightened, Scotland and the UK in general are probably going to suffer more than most.

"While we're bucking the trend at the moment, it's not a comfortable place to be.

"It's really important the Scottish government fulfils the promise they made a few years ago about reducing that tax or we will see more reductions, as we've already seen in other airports around Scotland and indeed a couple of routes ourselves, where APD has driven airliners out of the market."

Airline investment

Mr Dewar added: "The trouble is, it was promised as though it were imminent four or five years ago and airlines like Norwegian and Ryanair invested very heavily in putting new capacity into the market then.

"Because it's not happened and because they're not confident it's ever going to happen, they're now taking it away."

On Brexit, Mr Dewar welcomed the deal meaning there will be no new restrictions on flying in the EU after the UK leaves.

But he added: "What's less certain is what's going to happen with the wider economy.

"I think we're going to have a solid summer, but uncertainty - both in consumer confidence and in airline investment decisions - can't be helpful and we just need to get clarity as quickly as possible."

A statement from the Scottish government explained that work was ongoing to find a solution in regard to the Highlands and Islands exemption.

It explained: "This is crucial to ensure the devolved powers are not compromised, and we continue to work with the UK government to find a solution.

"While UK Air Passenger Duty continues to operate in Scotland, we call on the UK government to act now and reduce APD rates to support connectivity and economic growth across the UK."

For the latest business news as it happens, follow BBC presenter Andrew Black's updates each weekday morning on BBC Radio Scotland's Good Morning Scotland programme between 0600 and 0900.

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