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Taxing times for passengers

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LONDON, England (CNN) -- Since Thursday, passengers leaving British airports have had to pay a higher rate of air tax or face being barred from their flights.

Even people who bought tickets before British Chancellor Gordon Brown announced the tax hike in December must pay the new rate, which the British government aims to reflect the environmental effects of air travel.

Most airlines said they had already contacted people about the new charge although some have said that they will not let passengers fly unless they have paid the new tax in advance or arriving at the airport.

Others are accepting payment at check-in. Ryanair and bmi said they have contacted passengers and taken the money from the credit or debit cards used to book the original tickets, while Virgin Atlantic and EasyJet have asked their customers to pay via their Web sites.

British Airways said it had waived the charge for passengers who booked before tax was announced on December 6, 2006.

The levy doubles to £10 for short-haul economy flights; £20 for business class; £40 for long-haul economy and £80 for business and first-class.

Unsurprisingly the tax has proved unpopular among both passengers and airlines and there are doubt as to whether the tax will help the environment.

The British Air Transport Association said the higher tax may damage the domestic aviation industry.

"It is a misguided and punitive increase driven by party political considerations which will do nothing to improve the environment," said Secretary General Roger Wiltshire.

"The increase ... will better reflect the environmental costs of air travel," a Treasury spokesman told Reuters.

"It is airlines and travel companies -- not passengers -- who are liable for Airline Passenger Duty. It is a commercial matter for these companies whether or not, and how, they choose to pass this on to passengers."

The British Treasury said the duty will mean the equivalent of 750 less trans-Atlantic flights each year by 2011.

But this estimate is dependant on an behavioral change mainly among UK travelers, a Treasury spokesman told CNN. It is justifying the tax as means to dissuade people from flying, and hopes it makes them consider taking alternative means of transportation.

The money generated from the taxes, which is estimated to be almost $1.7 billion (£900 million) each year, will not be spent directly on carbon off-setting programs.

The revenue goes to the Treasury's consolidated fund and the extra money will be spent on "environmental and transport projects" at the next spending review.

Lawrence Hunt, CEO of new all-business class airline Silverjet, thinks that the increased rates are just stealthy taxes in green camouflage.

"The tax is also counterproductive, as passengers may believe they have already offset their carbon emissions by having paid this tax, when in fact the tax will not result in one iota less carbon being produced or offset," he said.

Silverjet was awarded 'Environmentally Aware Airline 2007' by the Institute of Transport Management. The airline are the first airline to include a mandatory carbon offsetting fee into their ticket prices, between $25 -$30, which they believe makes them the first carbon-neutral airline in operation.

Reuters contributed to this report.


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That's not going to cover it. The new Airline Passenger Duty came into force in the UK on Thursday.

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