Aviation: Airlines must fly more full planes
The aviation industry yesterday reacted angrily to the Chancellor's plan to replace air passenger duty (APD) with a per-plane "green" tax .
Mr Darling said that from late 2009, aviation duty would be paid on the number of flights taken, rather than the number of individual passengers. The change is designed to encourage airlines to ensure their planes are as full as possible.
"The new per-plane aviation duty will send an improved signal of environmental costs and ensure aviation makes a greater contribution to covering its environmental costs," he said. He added that the Government would consult with the industry before introducing the new tax in November 2009.
Most airlines said yesterday the proposals could increase red tape and marked the second tax blow in less than a year after Gordon Brown doubled APD in his pre-Budget report when he was Chancellor last December.
British Airways said taxes did nothing to reduce emissions and that including airlines in the European Union's emissions trading scheme was the best way to protect the environment.
"APD hasn't been used to fund environmental initiatives and there is no guarantee that a flight-based tax will either," a BA spokeswoman said, adding that the £400m BA will pay this year through APD could be used to offset the airline's emissions four times over.
But budget carrier easyJet, said it welcomed the Chancellor's proposal and said it wanted to work with the Government on a plan to take account of aircraft types and distance flown. Some analysts believe easyJet and Ryanair could be gainers from the new tax because their planes are heavily used. Frank Sangster, head of the environmental tax and incentives group at accountants KPMG, said: "The Government will have to set the rate at a level that hurts the aviation industry if it is to force airlines to become more efficient, increase load per plane and cut down the number of flights with empty seats."