New Green Tax: British Holidaymakers Face Higher Plane Fares

  • Date: 15/05/10

Holidaymakers are faced with the prospect of higher plane fares and fewer flights after the new coalition government confirmed it will scrap the existing Air Passenger Duty.

The flight tax has come under fire over the past year for huge increases and its imperfect application which has seen passengers travelling to countries in the Caribbean penalised with higher ticket prices than those holidaying in Hawaii despite the latter being further away.

Both the Conservatives and the Liberal Democrats pledged to replace it with a system which taxes per plane rather than per passenger, tackling inefficient planes and discouraging airlines from flying half-empty aircraft.

The change has been welcomed by carriers who often fly with full planes and have newer fleets which are more fuel-efficient.

However, there are fears in the industry over the wording of the agreement which claims that ‘any increased revenues’ from the duty would go towards the Lib Dem £10,000 income tax break.

The indication that the new duty will bring in more money than its predecessor suggests that passengers could end up paying a higher duty than before.

Holidaymakers could also suffer from a lack of competition if airlines which fail to regularly fill planes start axing flights in a bid to avoid paying the duty on unprofitable routes.

Critics have also pointed out that the new government has failed to ring-fence APD meaning there is no guarantee the ‘green tax’ would actually be used to benefit the environment.

Virgin labelled the new system ‘unworkable’ while BA claimed the only way to address airlines’ affect on climate change was through the EU emissions trading scheme.

‘The existing APD is not used to fund environmental or infrastructure benefits and there is no guarantee that a flight-based tax would,’ said a BA spokesperson.

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