News

The Federation of Tour Operators will take its Government challenge over Air Passenger Duty to the High Court today (July 17).

A judicial review will consider the legality of APD and the way recent increases in the tax have affected tour operators. A verdict is expected at the end of this month.

APD has been collected since 1994, but in December 2006 the Government announced it would double from February this year.

The FTO maintains the tax is illegal, arguing it breaches Article 15 of the Chicago Convention that taxes can only be levied on flights if they are in return for cost-based services such as security or air traffic control.

It also argues APD breaches the human rights of tour operators because they were not given sufficient notice of the charge and were forced to absorb substantial unplanned costs.

Finally, it says the tax is in breach of the Treaty of Rome on the right to free movement of goods and services across the European Union.

The FTO claims that late notification of the APD increase has cost the sector around £50 million, particularly as operators are largely precluded by law from passing on surcharges for unexpected new costs to booked passengers.

FTO director-general Andy Cooper also disputed the Government’s claim the APD increase was to raise money for environmental causes.

He said: “APD was not introduced nor intended as an environmental measure. As a tax levied on passenger numbers, it penalises environmentally friendly airlines with high load factors and rewards those with half empty flights.

“The legal action is primarily directed at the way the Government chose to introduce new APD rates, which has forced us to use all means possible to defend the sector from the entirely avoidable consequences.”

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