In its submission to the Scottish Government’s consultation on Air Passenger Duty, the International Airlines Group has called for this stealth tax to be scrapped not only in Scotland but across the UK and predicted a bonanza for Scottish airports.

Willie Walsh, IAG’s chief executive, said: “The Scottish Government is right to start getting rid of Air Passenger Duty. This is a tax on Scotland doing business, it puts off investors and penalises hard working families going on holiday.”

In the report, IAG highlights an Edinburgh airport study which said reducing APD could add £1 billion and 4,000 jobs to the Scottish economy, while not cutting it would cost up to £68 billion in lost tourism expenditure by 2020.

Willie Walsh added: “When Scotland axes this tax it will put real pressure on airports south of the border. People will drive to Scotland to avoid it. When Ireland scrapped its aviation tax the number of Northern Ireland residents flying from Dublin increased by 52 per cent in the first year.

“This competition distortion is likely to lead airports in northern England like Newcastle losing passengers to Scottish airports where the tax is lower. While supporting the Scottish Government’s objectives, we believe that APD must be scrapped across the UK.”