The Scottish government last year proposed a plan to abolish Air Passenger Duty (APD) and introduce a new discounted Air Departure Tax (ADT) from April 2018. The government planned to exempt journeys from certain airports in the Highlands and Islands of Scotland after getting approved by the EU under state rules. The time required for getting this approval, however, could exceed that of Brexit.
But proposers of this plan soon found themselves in a legal soup, as exemptions for journeys from the Highlands and Islands stood as an issue before implementing the new tax. Cabinet Secretary for Finance Derek Mackay claims that the UK government is responsible for this situation, which could cost the government about £320m to keep up the exemption. So what does this mean for low-cost fliers to Scotland’s airports?
RyanAir shuts operations at Glasgow air base
It was only October when low-cost airline RyanAir announced its operations from Glasgow Airport along with seven other routes. But perhaps passengers in Glasgow will no longer be able to benefit from the low-cost carriage because it decided to shut its base at the airport. RyanAir, which also has a base in Aberdeen, Edinburgh and Prestwick, announced that it would reduce the number of flights from Glasgow to three from twenty-three.
Please see below our reaction to the news Ryanair is to cut 20 routes at Glasgow Airport from November 2018. The airline will continue to operate its three-times daily route to Dublin and twice-weekly services to Krakow and Wroclaw as normal. pic.twitter.com/uAM2WeaVwE
— Glasgow Airport (@GLA_Airport) February 27, 2018
David O’Brien, Chief commercial officer, cited the change in Air Passenger Duty (APD) as the major reason why the airline is moving out of Glasgow. The government, however, expressed steadfast commitment towards slashing APD by 50 percent, but not without resolving certain existing issues. RyanAir broke this news as it revealed its schedule for this year’s winter. The airline would now fly only to Krakow, Wroclaw and Dublin from Glasgow.
O’Brien also claims that Glasgow Airport couldn’t bear the burden of uncertain taxation scenario caused by Brexit. The country’s aviation industry is one economic sector that is likely to face serious repercussions as a result of Brexit. The closure of the airline’s operations from Glasgow will transfer half a million passengers to Edinburgh, where the airline will be launching eleven new routes. An APD of £13 at Glasgow Airport is weakening an already-weak Scottish market.
How will the airline’s move affect jobs?
David O’Brien showed concern over the number of jobs that could be lost as a result of the move. He fears that Glasgow could lose over three hundred indirect jobs, especially about 500,000 passengers would be transferred to Edinburgh. O’Brien clearly expressed his disappointment over the Scottish government’s inability to fulfill its promise to eliminate APD. Instead of abolishing the tax, the government now plans to slash it to half, making the airline lose patience.
While Glasgow will see a loss of 300 jobs, Edinburgh is expected to see the introduction of 700 jobs. The airline seeks to launch forty-five routes from Edinburgh, which would include eleven new routes. O’Brien agrees that Edinburgh is not free from the disadvantages of APD but the capital city is a good destination for RyanAir. The airline, however, continues its operations from Prestwick Airport.