Bidding war could raise flight prices

The cost of flight tickets could rise dramatically under a new proposal to make airlines bid for take-off and landing slots at Britain's busiest airports.

The Institute for Public Policy Research is to criticise the Government's approach to tackling increasing volume of air traffic through expanding the country's airports. Instead, the influential think-tank will urge ministers to auction all take-off and landing slots at Heathrow and Gatwick.

The IPPR values the slots at more than £1.2billion a year and the scheme, set out in a report to be published in the autumn, is bound to lead to higher ticket prices for travellers as airlines do not currently pay anything.

Congestion at airports near London would be eased by the scheme because airlines would be persuaded to fly to less crowded and therefore cheaper destinations.

The left-of-centre IPPR's proposals were criticised by industry figures but welcomed by environmentalists. Paul de Zylva, of Friends of the Earth, said the IPPR had produced "the kind of analysis that ministers and civil servants should have delivered if they were being honest with the public".

But Roger Wiltshire, secretary general of the British Air Transport Association, which represents airlines, said the economic impact of the proposals would be "very significant" as consumers already pay about £1billion a year in air passenger duty.

The IPPR believes Government proposals set out last month to build a new airport in the Thames estuary or a third runway at Heathrow could be abandoned. It estimates that congestion at Heathrow costs about £500 million a year, £270 million to passengers and £231.5 million to airlines.