The assessment covers the five largest airports in Scotland (in terms of passenger numbers) and considers six alternative scenarios for a reduction in ADT. The hypothetical scenarios differ in terms of the bands (based on distance to destination with Band A representing short haul flights (from 0 to 2,000 miles) and Band B representing long haul (over 2,000 miles)) to which the tax reductions are applied. The extent to which the reduced taxes will be passed on to passengers by airlines in the form of lower air fares are reflected by what the report refers to as “Full Pass Through” or “Zero Pass Through” scenarios. The six scenarios considered in the assessment are as follows:
- Scenario 1a – 100% cut in Band A (Full Pass Through)
- Scenario 1c – 100% cut in Band A (Zero Pass Through)
- Scenario 2a – 100% cut in Band B (Full Pass Through)
- Scenario 2c – 100% cut in Band B (Zero Pass Through)
- Scenario 3a – 50% cut in Band A & Band B (Full Pass Through)
- Scenario 3c – 50% cut in Band A & Band B (Zero Pass Through)
The scenarios resulting in the largest noise impacts have been identified to be: Scenario 3c (50% cut in Band A & B and B with Zero Pass Through) for Aberdeen Airport and Scenario 1c (100% cut in Band A with Zero Pass Through) for Edinburgh, Glasgow and Prestwick Airports. These results, as expected, correspond with the economic assessment’s passenger movement forecasts from which forecast changes in air traffic movements (ATMs) have been derived. The largest increase in overall passenger movements from all airports was forecast to occur under Scenario 1c – where airlines do not lower air fares as a result of a tax reduction but instead invest in the development of routes applicable for Band A UK APD rates. Aberdeen Airport is the exception, where the demand response to lower air fares from an ADT cut (Scenario 3c) is expected to lead to greater increases in passengers (and subsequently ATMs) than from the supply side effect of route development.