A controversial government scheme to replace the current airline passenger duty (APD) with a vastly increased tax on aircraft is running into trouble, with a minister hinting that it may be delayed or even abandoned.

“Difficulties surround the decision,” parliamentary undersecretary for transport Jim Fitzpatrick told a conference last week. “There are strong arguments that we should not proceed with the transition.”

All air travellers currently flying from the UK pay APD of between £10 and £80, depending on destination and class of travel. Earlier this year, the government announced plans to scrap APD in favour of a tax based on the age and efficiency of the aircraft, which was expected to raise as much as £2.8 billion for Treasury coffers.

Any move to drop the plan would be welcomed by the airline industry, which has fiercely criticised the proposed new tax. The online ticket agency Cheapflights.co.uk warned that airlines would pass on the cost to the consumer, and predicted that the tax component of long-haul air fares would rise to £100 per passenger.

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The tax also led the US government to write a formal letter of protest questioning the scheme’s legality. “The Treasury’s proposal, although cast as an environmental measure, appears in reality to constitute nothing more than a device for generating additional revenue,” the US ambassador wrote.

While the tax is not scheduled to come into force until November 2009, a preliminary outline of its workings is due to be released next month, with full details to be announced this October. This would give tour operators time to price the tax into their brochures.

In the light of Fitzpatrick’s comments, however, industry observers believe that this timetable cannot now be met, which calls the future of the tax into question.

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