LOGANAIR has welcomed a government commitment to review air passenger duty (APD) before the March budget in the hope that this could lead to cheaper island flights.
Referring to the government’s Flybe rescue package that could result in the struggling airline being granted a deferral of a £106 million APD tax bill, Loganair’s managing director Jonathan Hinkles said there was a strong environmental argument for an APD exemption on all island flights.
The two former franchise partners were locked in a bitter price war for a four month period at the end of 2016 when they went head to head on the Sumburgh routes to Aberdeen, Edinburgh and Glasgow.
Flybe, in partnership with Eastern Airways, brought in an Embraer 170 jet as well as cheaper fares to entice the travelling public, but things went quickly wrong for Flybe as it was struggling to keep to its tight timetable that allowed for next to no weather related delays.
Some industry analysts have suggested that Flybe lost millions with its Shetland venture adding to the financial troubles that have now brought the airline close to collapse.
The owners of British Airways have meanwhile filed a state aid complaint over the Flybe bailout, the Guardian newspaper reported on Wednesday.
Hinkles meanwhile said that Loganair hadn’t commented publicly on Flybe’s troubles yet.
Speaking to Shetland News he confirmed “that Loganair pays – and has always paid – its Air Passenger Duty and statutory taxes on time”.
He added: “We welcome the possibility of a reform to APD which we hope will benefit island flights through a full exemption, particularly when there is a strong environmental argument to support such a change when flying is far more environmentally efficient than using the ferry on journeys to Shetland.”
Currently passengers carried on flights from airports in the Highlands and Islands are exempt from paying APD, but those flying to the islands from outwith the area, such as Aberdeen or Edinburgh, have to pay the £13 levy.
The airline, which is regularly criticised by islanders for its pricing policy, is in the process of replacing its fleet of Saab 340 and Saab 2000 aircraft with larger ATR72 planes that have a better environmental performance.
According to Loganair, the ATRs’ carbon emissions are 30 per cent lower per passenger compared to the Saab 340 and 45 per cent compared to the Saab 2000.
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