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[LONDON] British finance minister George Osborne said he would scrap a tax charged on children flying out of the country, making it cheaper for families to travel.
Presenting his half-yearly budget statement to parliament on Wednesday, Mr Osborne said that from May 1 next year, air passenger duty (APD) would not be charged on children under 12 and from 2016, it would be abolished for all under-16s.
Britain's APD is a tax of between 13 pounds (US$20.5) and 194 pounds depending on flight distance and class of travel charged on each passenger leaving the country, and which the airline industry says has a negative impact on the economy.
"I want to reduce the cost of those tickets for families," Mr Osborne said.
Shares in London-listed airlines easyJet, British Airways-owner IAG and Flybe extended earlier gains to trade up 2.1 per cent, 1.6 per cent and 5.2 per cent respectively.
The announcement comes days after Scotland was given the go-ahead to slash its APD if it chooses to under a new tax deal with Britain, potentially giving Scottish airports an advantage over rivals south of the border in England.
Flybe Chief Executive Saad Hammad welcomed the change but said more needed to be done.
"This is just tinkering at the edges and represents a missed opportunity by The Chancellor to show that he is serious about the economic regeneration of the UK regions," he said in a statement.