Passenger air tax switched to planesBut costs likely to be passed to passengers

10 October 2007

Airport sign directing travellers to the terminal.

Air travel is to be taxed by plane rather than by passenger to encourage more efficient use of planes.

Chancellor Alistair Darling unveiled the move – which comes into force in November 2009 - in his first pre-budget report.

The Chancellor told MPs: ‘I propose that aviation makes a greater contribution in respect of its environmental impact and for this to be as environmentally effective as possible from 2009 I intend to levy the duty not on individual passengers but on flights.’

Air passenger duty (APD) levels will be frozen in the run up to the change. Currently, APD is £5 to £10 for economy-seat passengers on domestic and European routes, and £20 to £40 for economy-seat travellers on long-haul flights.

Air passenger duty

Which? travel expert Bob Tolliday said: ‘This tax should give more incentive to airlines to run their fleets more efficiently and push up costs for companies that fly their aircraft half empty. I doubt it will lead to a cut in fares as companies will pass on the costs to passengers and fares may rise on poorly performing airlines.’

Easyjet Chief Executive Andy Harrison welcomed the decision. He said: ‘We have long argued that the current structure of APD is in need of reform.

‘A tax that penalises families but excludes private jets; and charges passengers travelling to Marrakech the same as those travelling to Melbourne, is just plain wrong. A structure that taxes a passenger in the newest, cleanest aircraft the same as someone in an old gas-guzzler cannot be allowed to continue.’