Page last updated at 01:49 GMT, Saturday, 11 July 2009 02:49 UK

Airlines call for rethink on tax

Airline passengers
The changes mean passengers will pay more the further they fly

The world's airline industry is urging the UK government to abandon a rise in air passenger duty, which would mean long-haul flight prices rising.

The International Air Transport Association warns the levy is damaging an industry already on its knees.

Britain is the only place to have such a tax and the Treasury now wants to base it on how far people fly.

Ministers say flying is relatively "undertaxed" and the changes "better reflect the environmental costs".

The duty is currently £10 for short-haul flights and £40 for longer journeys, costs which airlines pass on to passengers.

Under the government's plans, the tax will rise to £85 for Australia and £60 to the US by November next year.

'Survival mode'

The International Air Transport Association (IATA), which represents the world's airlines, has described the tax as "irresponsible".

Giovanni Bisignani, of IATA, said: "We are in survival mode... we don't understand why the UK is still insisting with an air passengers duty that has nothing to do with the environment."

The industry aimed to become carbon neutral by 2020, he said.

It is a crazy tax that the government should scrap
Julia Simpson, British Airways

The airlines and unions are united in calling for a government re-think.

They say it will put tens of thousands of jobs at risk and damage the UK's position as a global hub as more passengers start to use European airports where there is no tax.

There are 200 fewer routes operating from the UK this summer compared to last.

Green tax

Julia Simpson, head of corporate communications at British Airways, said: "It is a crazy tax that the government should scrap.

"A family of four travelling to Australia is going to be facing a bill of £340 before they have set foot on the plane and paid for their tickets."

But Darren Johnson, from the Green Party, said it was a good thing if people were discouraged from flying.

"We need to be increasing the air passenger duty," he said. "Aviation is simply not paying its way in terms of the environmental damage it causes."

A Treasury spokesman said: "Flying is relatively undertaxed, with no VAT on tickets or duty on aviation fuel.

"The changes to aviation duty better reflect the environmental costs of flying and help ensure that aviation contributes its fair share to public services."

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