UK tour operator body Federation of Tour Operators (FTO) has launched a legal challenge to the UK’s air passenger duty (APD), which was controversially doubled from the start of this month.
The FTO – which comprises 13 prominent UK tour operators – is challenging the legality of the APD and says, if its case is successful, it will mean the complete withdrawal of the tax.
It notes the action has been prompted in particular by the rapid speed of the tax hike. FTO says the industry in the past has been given nearly a year to prepare for change, while on this occasion the additional tax was announced in December 2006 and entered effect just seven weeks later on 1 February. Some airlines have retroactively imposed the tax on passengers.
“This has proved to be disproportionately unfair to tour operators which, unlike airlines, are largely precluded by law from passing on surcharges to customers who have already booked. They work on long lead times and need time to introduce changes,” the FTO says.
As a result, tour operators will have to bear the cost of the tax generated by four million passengers who had already booked their holiday flights – a total of some £50 million ($98 million), it says: “This is not a burden FTO members launching the action are prepared to absorb and, unless an effective compromise is rapidly agreed, they have no choice other than to challenge the entire basis of APD.”
FTO will challenge the legality of APD on two grounds. It will argue that, as a 1944 Chicago Convention signatory, the Government is not entitled to impose charges on aircraft solely for the right of transit over, from or into the UK from another state. It will also claim that the APD breaches the European Convention on Human Rights because the speed of its implementation deprived tour operators of income to which they were legitimately entitled.
UK finance minister Gordon Brown in December announced a doubling of the intra-European Union economy rate to £10 ($19) and the levy on business and first class tickets to £20 from the start of February. Long-haul economy and non-economy rates similarly rose to £40 and £80 respectively. The government said the move was part of its effort to combat environmental concerns.
The move has been fiercely attacked by airlines – who argue that the tax is a blunt instrument against climate change – while the government’s rapid implementation of the tax hike has already been criticised by a cross-party treasury committee.
FTO director general Andrew Cooper says: “APD which, since its introduction, has raised some £12 billion is a general tax, and not one which is used to support transport or environmental initiatives. It emphatically is not an effective environmental measure.
“We will not allow any post-rationalised ‘greenwashed’ claims for APD to muddy the issue. Our legal action is being generated simply by the way in which the Government chose to introduce the new APD rates. It was unfair on tour operators and we will use all means to defend the sector from the entirely avoidable consequences.”
Source: FlightGlobal.com
