Leading holiday groups will stop offering so-called premium economy seats to their customers after the summer because of a dramatic hike in the Air Passenger Duty (APD).
Premium economy seating is charged the same levy as business and first class seats, despite offering considerably less to customers. Typically, customers get more leg room.
The APD is set to increase to as much as £55 a seat this November on some long haul flights. One leading travel group said: "It's absurd. It just doesn't seem right that a levy should dictate how passengers travel but it does."
Concern over the APD comes as the recently installed Transport Secretary, Lord Adonis, considers the industry's response to plans to increase the £1 a seat APC [Atol passenger contribution] to £3 from October. The Civil Aviation Authority says the increase is needed to eliminate a deficit in the Air Travel Trust Fund, which was hit by the collapse of XL Leisure last year.