A new report, released today (Thursday) warns that last November’s hike in Air Passenger Duty (APD) could cost Scotland’s airports more than one million passengers over the next three years, damage business competitiveness and drive high spending international visitors elsewhere.

The stark report, commissioned by Aberdeen, Edinburgh and Glasgow Airports, suggests that the latest tax rise will cost the cost the Scottish economy up to £77 million in lost tourism spend with the loss of approximately 1.2 million passengers over the next three years, including around 150,000 inbound international visitors.

Domestic routes are set to be hit hardest, losing almost 500,000 passengers. A drop in demand of this scale could undermine the long term viability of some routes, particularly lifeline routes to the Scottish Islands.

APD was first introduced in 1994 at a rate of £5 for European destinations and £20 elsewhere. The last three years have seen a succession of increases in the rate of APD, with passengers now paying up to £170 in tax as a result of the most recent rise in November 2010.

UK aviation tax rates are the highest of any major European country and are forecast to rise under proposals in the Coalition Government’s budget.