The report states under the tax measures header: “The parties agree that a switch should be made to a per-plane, rather than per-passenger duty; a proportion of any increased revenues over time will be used to help fund increases in the personal allowance.”

Commented Gareth Williams, CEO of flight comparison website, Skyscanner:

“Air Passenger Duty (APD) taxation has been a bone of contention within the travel industry for some time now. It was introduced as a duty charged on the carriage of passengers travelling from UK airports under four bandings based on the distance between London and the capital city of the destination.

Extortionate increases were due this November which would see the highest distance tax bracket increase from £55.00 per flight in November 2009 to £170.00 in November 2010.

The government classified APD as a green levy to discourage long haul flights by putting a financial burden on passengers. As this tax was never specifically ring fenced for investment in environmental or carbon offsetting initiatives many felt it was simply a revenue generating device for a government suffering from a significant budget deficit.

The abolishment of APD in favour of a ‘per plane levy’ means airlines would be charged per plane in order to incentivise them to fly with full aircrafts or invest in more fuel efficient fleets.

Airlines are already struggling to deal with record fuel prices and, while initially this policy may appear to remove financial burden directly from passengers, ultimately the airlines will still need to manage this cost so it will inadvertently be passed on to consumers.”