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.’