Airlines will have to pay up to EUR€26 (USD$33.04) per passenger under the German government's plan to impose an air travel tax to raise EUR€1 billion a year, according to a draft law.

German Chancellor Angela Merkel last month announced the tax plan as part of EUR€80 billion of budget measures, stunning the aviation industry and sparking protest from airlines and lobby groups.

Under the plan, airlines will be taxed according to the distance their passengers travel, starting January 1, 2011.

For shorter trips within the European Union and a number of other countries less then 2,500 kilometers away, the tax is set at EUR€13. For longer trips, at EUR€26.

The tax plan comes as European airlines struggle to return to profitability after the industry's worst downturn in decades.

Airlines body the International Air Transport Association last month warned that Europe's aviation industry was recovering more slowly than expected, hit by a volcanic ash cloud that closed airspace across a large part of the continent in April, as well as by a weaker euro.

"We see this tax as a distortion of competition," a spokesman for Air Berlin, Germany's second-biggest airline said.

"This is a massive additional burden for our passengers. That is not a satisfactory proposal."

German flagship carrier Lufthansa was not immediately available for comment.

When news of the tax plans emerged last month, analysts said that airlines might be able to pass on half of the tax to their passengers by raising ticket prices. Executives and industry groups estimated prices could rise by EUR€8 - EUR€16 per ticket.