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Airport fears passengers will take flight to independent Scotland
4:52pm Tuesday 10th June 2014 in News
LOWER passenger taxes in an independent Scotland would harm the North-East’s major airport, it was claimed today.
Newcastle International Airport fears large numbers of travellers would choose to fly from north of the Border if air passenger duty is cut after September’s independence referendum.
Scottish transport minister Keith Brown has said that an SNP-run independent Scotland would immediately halve air passenger duty (APD) “with a view to abolishing it completely”.
The duty on an economy class seat currently stands between £13 and £97 per passenger.
Managers at Newcastle Airport fear that some of its 4.4m passengers a year would opt for cheaper flights from Scottish rival Edinburgh if duty is cut, with the loss particularly felt on long haul flights such as the Dubai route.
Graeme Mason, planning and corporate affairs director, said Newcastle Airport did not take a position on which way the Scottish people should vote in the referendum, but said the UK Government should be aware of its potential impact on the region.
He said: “If APD in Scotland is abolished or significantly reduced, cheaper flights from Scottish airports will distort the market, resulting in large numbers of passengers from the North of England travelling across the border.
“This will reduce our connectivity and damage our economy.
“The UK Government should resist the inclusion of APD in a devo-max settlement either before or after the referendum”.
He added that if Scotland votes for independence, “We call upon the UK Government to match any reductions introduced in Scotland to avoid market distortion and an unfair economic disadvantage to the North of England.
“If they don’t do this, the North of England is going to be at a serious disadvantage to the rest of Scotland.”
However, pro-independence group Business For Scotland says the region would benefit from increased investment if Scotland abolished the duty.
Spokesman Ivan Mckee said: "Scotland is doing what it should be doing; we're bringing ourselves into line with other countries across Europe who have much lower levels of Air Passenger Duty than we currently have.
"It's the best thing for the Scottish economy to do, and a growing Scottish economy would be good for the northeast of England.”
Aviation expert John Strickland, of analysts JLS Consulting, agreed that some passengers could switch airports if duty was cut.
He said: “There is certainly an overlap in the catchment areas of Edinburgh and Newcastle.
“Customers will typically prefer to fly from their local airport, but when there is a big price differential, which could be the case if APD was reduced or cancelled in Edinburgh but not in Newcastle, a number of customers could switch their travel plans”.
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