An passenger jet takes off from Edinburgh Airport in Scotland
A report from Edinburgh Airport shows the benefit of reducing air taxREUTERS

Cutting air passenger duty (APD) by 50% could boost Scotland's economy by £1bn by 2020, a newly published report claims. A study from Edinburgh Airport and compiled by consultants York Aviation states that if APD were to be slashed in half, as Holyrood promised as laid out in the Smith Commission, it would also create some 3,800 jobs.

The report adds that Scottish airports are losing out because of the current air tax – stating that if things to stay as they are, airports up north will miss out on one million passengers a year. Air tax in the UK is the highest of any major European country, raising almost £3bn in 2013/14. However, the report claims that if things carry on, it will lose out on passengers.

If and when the cut does happen, it anticipates an additional 700,000 passengers for Scottish airports in the first year, rising to 900,000 after five years.

Mike Cantlay, Chairman of VisitScotland, said: "Scotland is a must-visit tourism destination and, every year, we welcome millions of visitors from all over the world. There is no doubt, however, that Air Passenger Duty is acting as a major deterrent to many potential visitors. Few other EU countries levy APD, so this places Scottish tourism at a competitive disadvantage."

Edinburgh Airport's chief executive Gordon Dewar said: "We've long argued that APD is a tax on Scotland's ability to compete with European airports of our size, and our economy is footing the bill in lost jobs and lost opportunities. It's also damaging the ability for our passengers to travel and to take advantage of the amazing connectivity we have from Edinburgh."