23 October 2017

Why is ADT so important for HIAL?

Inglis Lyon explains why the existing exemption must remain

Air Departure Tax (ADT), is a tax payable by aircraft operators and charged on the carriage of chargeable passengers on chargeable aircraft by air from airports in Scotland. The Highlands and Islands are exempt for all departing passengers which for a family of four on a transatlantic trip could save nearly £300 pounds. On a European trip the same family a more modest saving of nearly £60.

Importantly our airlines, BA, KLM and EasyJet have all confirmed that it is an important element in their pricing model and without it, fares out of the Highlands would increase with the associated drop in traffic and natural consequences.

We have to retain our exemption.

At HIAL we are charged with improving local connections and must lobby against issues which could hinder us in our ambitions and those of the region. We must keep this issue on the pitch, not allow it to be kicked into the long grass and ensure that we retain the exemption that allows us to compete on a level playing field with the players from the central belt – well almost.

For them the argument is different. Without ADT, they and one side of the economic argument see increased business, better connectivity and of course better returns for Scotland plc. However, it cannot be at the expense of increased fares and poorer connectivity for the Highlands and Islands, particularly given the lack of adequate surface alternatives.

Much work done, but much yet to do.

On other external matters the apparent lack of progress in Brexit discussions is worrying particularly with regards to aviation. Summer schedules for 2019 must be finalised by March 2018 and with less than six months to run we remain uncertain as to whether or not we will continue to fly borderless across the EU as permitted under the Single European Skies agreement or to the USA as part of Open Skies agreement. However, given the significance of aviation to Europe and UK plc it’s more than likely that much background work has already been undertaken and with a “one leap and he was free moment”, a solution to aviation will materialise – it has to.

To end on a high note, the competition between Loganair and Flybe continues and the October school holidays will no doubt have been some of the busiest that Kirkwall, Stornoway and Sumburgh have experienced for some time. The overall figures on the competitive routes are up between 25% and 35%, which, notwithstanding some of the reliability issues is good news for the islands. For everybody that has been involved in getting this increased business through the terminals, thank you.