This item was published during the term of a previous administration that ended in April 2007
Listen
Air passenger duty changes come into effect
27/03/2001
Air passengers flying from Highlands and Islands airports will receive a boost from 1 April 2001 following the removal of air passenger duty from essential flights.
Transport Minister, Sarah Boyack, today welcomed the move which will help secure greater accessibility to affordable, lifeline air links.
Ms Boyack said:
"From April 1, air services from Highlands and Islands' airports will be exempt from air passenger duty (APD). This means that flights wholly within the Highlands and Islands will also be completely exempt.
"The APD exemption recognises the area's reliance on air transport for lifeline links and is a positive step for the communities concerned. It will also help to promote social inclusion and will benefit business and tourism in the Highlands and Islands."
The Minister also said:
"I am very aware of the vital importance of lifeline air services to the economic and social well-being of the Highlands and Islands. The Scottish Executive worked with the UK Government to secure exemptions for Highlands and Islands' air services.
"We are committed to the maintenance of affordable links for these areas and the changes to air passenger duty will reduce the burden on the communities concerned which have long experienced high air fares.
"Aviation is a key to competitiveness and to economic growth. It is a catalyst for the growth of tourism and to attracting inward investment. This exemption is positive news for the communities in the Highlands and Islands."
BACKGROUND
1. Air passenger duty is a tax matter and therefore a matter 'reserved' to the UK Government. The duty was first introduced from 1 November 1994 to broaden the tax base in order to include a sector which had been subject to relatively little tax. Since then there have been exemptions from the duty for passengers in aircraft of under 10 tonnes maximum take off weight, or in aircraft seating fewer than 20 passengers such as the Britten-Norman Islanders used on the inter-island air services in Orkney, Shetland and the Western Isles. In November 1997, the rates were increased from £5 to £10 on flights to UK and European Community destinations and from £10 to £20 elsewhere.
2. Following consultations, the Chancellor announced proposals to introduce changes to APD in the 2000 Budget when it was confirmed that air services from the 10 Highlands and Islands' airports (Barra, Benbecula, Campbeltown, Inverness, Islay, Kirkwall, Stornoway, Sumburgh, Tiree and Wick) would be exempt from APD from 1 April 2001. The Highlands and Islands' exemption was based on a sparsity of population criterion as a definition of peripherality.
3. There will also be a new reduced rate structure for lower cost flights from 1 April. This will mostly affect low cost airlines such as easyJet, Go and Ryanair where APD has been seen as having a disproportionate impact. Return flights into the Highlands and Islands will continue to be subject to APD but a lower rate of £5 per journey.
4. Prior to the 2000 Budget announcement, the UK Government were made full aware of the Scottish Executive's and Scotland Office's support for changes which would secure exemptions for Highlands and Islands' air services.
News Release: SE0820/2001
27 Mar 2001