Regional airline Flybe has demanded a fair deal for people travelling from airports in England after Scotland uses new devolved powers to cut air passenger duty (APD) north of the border.
Calling for APD across the UK to be “dramatically reformed” or scrapped entirely, Flybe said political developments in Scotland and Wales may lead to “market distortions”.
Devolution of the power to charge tax on passengers leaving Scottish airports was a recommendation of the Smith Commission.
The Scottish Government intends to reduce the burden of APD in Scotland by 50% by 2021.
Last month, bosses at Aberdeen, Edinburgh and Glasgow airports called on First Minister Nicola Sturgeon to make a swifter 50% cut – in 2018 – a Holyrood election manifesto commitment.
HM Revenue and Customs (HMRC) figures show UK passengers are paying more than £3.1billion a year in APD, Flybe said yesterday.
The figure has rocketed since 1995, when HMRC raised a “mere” £331million, the carrier added.
Flybe, which operates from all the major Scottish airports and smaller ones in the Highlands and islands through a franchise deal with Paisley-based Loganair, said APD penalised domestic passengers who paid more per mile than people using long-haul flights.
As an example, the airline highlighted APD of 12p per mile, or £13 in total for a 109-mile flight between Manchester and the Isle of Man. This was compared with 0.6p per mile, or £71 in total for a trip from Manchester to Auckland in New Zealand.
Return journeys only compounded the “iniquity” of the current system, Flybe said, adding Scottish and Welsh moves would reinforce the need for a level playing-field.
Flybe said: “Devolution of APD in Scotland and Wales is likely to create market distortions and issues of fairness for passengers living in England.
“Flybe calls on HM Treasury to vary APD rates within England by increasing APD at large slot-constrained airports – defined as those that carry more than 25million passengers per annum – and decreasing it at regional airports.”
Flybe chief executive Saad Hammad added: “Since APD was introduced it has been an ever growing cash cow for HM Treasury, proving a clear impediment to regional economic growth and development throughout the UK.
“HM Treasury has overlooked a fundamentally important issue; namely the way in which APD disadvantages regional travellers on a per mile basis in comparison to those travelling short-haul to Europe, and in particular against those travelling long-haul.
“We need the (UK) Government to be responsive to the needs of those who live outside the perimeter of the M25 (London ring road), where 80% of UK GDP (gross domestic product) is generated, and abolish or significantly reform APD.”