In 2015, David Cameron, made it clear that the government would not allow airports and regions to be adversely impacted by the devolution of APD. During the General Election campaign, he said: “The SNP Government in Scotland is committed to using its new powers to cut and eventually abolish Air Passenger Duty from Scottish airports. This could distort competition and see business drawn north of the border with a huge impact on airports in the rest of our country so we’re reviewing the way Air Passenger Duty works to make sure other cities don’t lose out. We are not going to accept a situation where there’s unfair tax competition. We will do what’s necessary to make sure England’s regional airports can succeed.”
Scotland has now introduced its Air Departure Tax Bill as a replacement for APD and has committed to reducing it from 2018.
Newcastle Airport maintains the view that the Government should commit to matching any reductions in Scotland across the rest of the country. Nick Jones, Interim Chief Executive at Newcastle International Airport, said: “The impact of changes to Air Passenger Duty in Scotland on both the Airport and the North East economy is so great that we must raise this important issue back up the Government’s agenda.
“Our modelling suggests that if Scotland reduces the tax to zero then we could lose between 500,000 and 900,000 passengers per year. Our air services could also be affected and would make it difficult for the airport to grow.
“Newcastle Airport is the international gateway for the North East and this would have a great impact on the entire region. The airport is crucial in delivering connectivity with a number of our routes very important to the business economy, providing them access to global markets.
“We welcome the recent dialogue we have had with the Government and hope this will lead to the identification of an appropriate solution during the course of 2017.”