- Moderator
- #41
I think it's because of the different outlook of each government. The UK government earns billions of pounds off it for the treasury and in their eyes if you look at the 4 biggest airports, Heathrow has airlines queing up to operate out of it, Gatwick has no problems attracting new airlines and both Stansted and Manchester are the same and keep growing so they probably don't see the need to cut/abolish and i don't they care much about encouraging airlines to the smaller airports.It's odd that different governments take varying views on the subject. Westminster seems set against any significant cut or abolition. The SNP in Scotland is pro reduction of the tax and abolition if it could afford to. The Welsh Government says it would abolish the tax if given the power although at times it seems they are talking about long haul APD. I don't know whether they could afford to abolish all APD.
Of course, abolishing or substantially reducing APD might not necessarily lead to lower fares. Airlines might simply maintain fare levels and pocket the APD element in order to improve yields or in some cases attract other airlines and/or routes.
The Scottish government is probably in the middle. It's 2 big airports are generally doing well but they would want to be able to attract new especially long haul and European routes to help the economy grow and create more jobs through increased tourism and better business connections but as their airports do earn a lot of APD as it is cutting it completely would hurt them financially so hence the 50%.
For the Welsh government it would be a development tool to encourage existing airlines like Flybe and Ryanair to operate new routes and expand their operations and and to have something to go to new airlines to offer as an incentive especially for long haul. Considering CWL is a small airport the loss for the Welsh government wouldn't be as much as the Scottish or UK.
I find it interesting that in these APD debates the Republic of Ireland never gets mentioned. They have a low APD and i'm sure it helps both Aer Lingus and Ryanair be competitive in the Irish market and Aer Lingus in the trans atlantic market and encourages new airlines like Hainan.
As for the airlines i doubt very much they would pass the reductions onto the customer but it would enable them to make more money and incentivise them to grow at airports with low APD.