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Last Updated: Tuesday, 28 October, 2003, 21:11 GMT
Air duty rise 'could cost jobs'
EasyJet plane on the runway
Easyjet has promised to fight any rise in duty
A travel trade body has urged the government not to raise air passenger duty.

Any increase in the duty could raise the cost of flight seats and hurt UK job prospects, the Association of British Travel Agents (ABTA) has warned.

Recent press reports have said the duty could rise from 20 to 40 on long-haul flights, and from 5 to 10 on domestic and European routes.

The duty on domestic and European flights was cut by the government last year.

Applying the brake

Speculation that air passenger duty could be increased has risen following a government review of UK air transport.

Any increase in tax revenue would be more than offset by potential job losses and a drop in visitor numbers to the UK
ABTA spokesperson

The forthcoming Aviation White Paper to be published in December is expected to give the green light to new runways in the south-east of England, including a third at Heathrow.

Some environmentalists favour a rise in duty as a way of stemming the growth in air passenger numbers.

However, industry bodies and airlines have reacted angrily to the talk of a rise.

"Any increase in tax revenue would be more than offset by potential job losses and a drop in visitor numbers to the UK," an ABTA spokesperson told BBC News Online.

"In addition any rise in the duty would have a disproportionate effect on the low paid and families on a budget."

Budget airline Easyjet has vowed to "fight tooth and nail" against any increase.

Duty reverse

Air Passenger Duty was introduced in the Finance Act 1994.

The duty is levied by the government on flights leaving any UK airport and boosts Treasury coffers to the tune of 800m each year.

Last November the Chancellor reduced the basic rate of air passenger duty - payable on European and domestic flights - from 10 to 5.

The Department of Transport and the Treasury would not confirm that a rise in air passenger duty was under consideration.




SEE ALSO:
Row looms over cheaper air duty
30 Oct 02  |  Business


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