The FTO lost its claim for £50m compensation today after the Court of Appeal chucked out its appeal against a High Court judgement last year.
The organisation was appealing against the hurried doubling of Air Passenger Duty last year and the government’s method of handling it that meant tour operators would have to pay the increased APD for passengers who had already booked holidays. Airlines, however, were able to pass on the hike to customers.
The High Court said in 2007 that there were no grounds for questioning the legality of the APD charge but did accept that tour operators were left in a costly position.
In response to today’s outcome, the FTO said it was reviewing its options and issued a statement that said: “The Treasury has severely and unfairly penalised the tour operators and did not create a level competitive playing field. At a time when the economy needs stability and confidence, the wider business community as a whole will also note with concern that the Court in its deliberations established that the increase was in practice a retrospective tax, and that a key driver for the Government’s action was simply to raise revenue, not just for supposed environmental benefits, reflecting what the FTO and its members have publicly stated from the outset.â€
By Dinah Hatch
