Scottish ministers could deliver a massive economic boost to the Highlands and islands by slashing the cost of flights to the region.
Finance Secretary Derek Mackay revealed last night that the government is investigating axing a tax on air passengers heading north.
Travellers departing from airports in the Highlands and islands are already exempt from the levy, but it could soon be extended to cover inbound flights as well.
The move was hailed last night as a “blessing” and a “welcome boon” to the region.
But concerns were also raised after it emerged that the Scottish Government needs permission from Brussels to introduce the price cut – and even to keep the region’s existing exemption from tax on outgoing flights.
Mr Mackay said ministers may be forced to consider “alternative solutions” if approval from the European Commission is not given by the time Scotland’s new air departure tax (ADT) is introduced.
The existing air passenger duty (APD) adds £13 to a lowest cost seat on a flight under 2,000 miles, £26 to other standard class seats and £78 to premium tickets, and rises to £75, £150 and £450 respectively on journeys over 2,000 miles.
People travelling overseas from Scotland often get hit twice by the levy if they change planes in London.
Powers over the tax have recently been devolved to Holyrood, however, and the Scottish Government is progressing legislation with a view to halving it nationwide, and eventually scrapping the levy entirely.
Travellers leaving airports in the Highlands and islands have been exempt from the tax since 2001, but it has now emerged that the Scottish Government needs permission from the European Commission to retain it when the new legislation comes into force.
Last night, Mr Mackay said he was fighting to keep the discount – and he also revealed he was also considering whether it could be expanded to inbound fights to the Highlands and islands.
“That might be possible. What happens at the moment is that departing flights are exempt but flights to the Highlands and islands are not,” he said.
“There was a request to look at it and it will be looked at.”
Asked what would happen to the existing exemption on departing flights if the European Commission does not approve it before the new legislation comes into force, Mr Mackay said: “The position of the Scottish Government is clear – we want this exemption to be retained.
“That is what we will pursue. I can absolutely guarantee to people and businesses in the Highlands and islands that the Scottish Government is working very hard on this. If that isn’t in place, we will look at alternative options.”
Mr Mackay said that permission was required from Brussels despite the UK’s looming exit from the European Union because the country remains a member state.
The UK Government, as the member state, will handle the application to the commission.
Inglis Lyon, managing director of Highlands and Islands Airports Ltd, welcomed the prospect of axing the tax for inbound flights.
“If that were to happen that would be a blessing for us. We’re four hours from the central belt and if we could achieve that it would be a welcome boon for the region.”
He added: “The exemption is a key tool when we’re speaking to airlines to try to attract them. It’s a sizable chunk of money.
“It’s very much a wait and see situation. We just have to play it by ear.
“The first thing is to retain the 100% discount for the region and the second thing is to see if we can try to extend it.”
Tavish Scott, Liberal Democrat MSP for Shetland, said: “Any improvement on the cost of flying into the Highlands and islands – for people visiting and for people returning home – would be welcome. It would be a huge boost.”
On the existing exemption, he added: “This would be a major concern if it does not get sorted out.
“The Scottish Government is right to push the UK Government to make sure the European Commission approve what has been in place for years.
“It would be extraordinary if the commission didn’t.”
