A low-cost Australian airline Jetstar may notice an extra charge of the New Zealand safety levies from December. Much to the annoyance of the other carriers, the company avoided paying the levies since it began domestic operations in June.

Being the only domestic airline that doesn’t pay the levies, Jetstar is expected to pay levies worth about $1.70 per passenger on a domestic flight and about half that on Trans-Tasman flights.

Discussing about the "the magnitude of the financial difficulties" the exemption caused, Civil Aviation Authority reports that without corrective action it would face a deficit of $4.5 Million at the end of the June 2010 financial year, $3.5 Million of this being the non-payment of levies by Jetstar.

Accusing about the inadequate consultation and being an easy target to enhance the drooping finances of the authority, Jetstar states that it pays $12 million to the CAA's correspondent in Australia covers safety oversight work done in New Zealand.

On the contrary, CAA argued that Jetstar is benefited from the authority's aeronautical safety environment so it should pay for the services. "At the moment they're not paying anything for their operations in New Zealand because they're not subject to the fuel tax that they would be when they're flying in Australia," said CAA spokesman, Bill Sommer.

"The levy and its cost would naturally need to be absorbed into our own cost base and into domestic New Zealand and Trans-Tasman fares. It would need to be reflected in our fares," a spokesman said last night.

Jetstar spokesman Simon Westaway said, the carrier had not yet been informed about the proposed levy change, although parent company Qantas has been talking to CAA about the issue.