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BERLIN (Reuters) - Negotiators for a new grand coalition between Chancellor Angela Merkel's conservatives and Germany's Social Democrats plan to progressively abolish the country's air transport tax, according to a working paper seen by Reuters on Friday.

The tax is levied on ticket prices and costs between 7 and 40 euros ($8.74-49.96) depending on the distance flown.

The government collects over 1 billion euros a year from the tax, with over half the total paid by German airlines, including Lufthansa <LHAG.DE>, Germany's largest carrier.

"We want to gradually abolish the air transport tax in this legislative period," the paper said.

Lufthansa shares turned slightly positive after the report, making them one of only two gainers on a 1.3 percent weaker DAX index at 1148 GMT.

The BDL aviation association, which represents the interests of the airline industry, declined to comment on the coalition negotiations. It has previously called for the tax to be abolished.

(Reporting by Markus Wacket; Additional reporting by Victoria Bryan; Writing by Thomas Escritt; Editing by Paul Carrel and Maria Sheahan)

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Reuters