The Federation of Tour Operators is considering an appeal following the loss of its legal challenge to the Treasury over the doubling of Air Passenger Duty in February.
The FTO joined members Kuoni and the newly renamed TUI Travel in seeking a judicial review of the APD rise in the High Court in July, arguing the retrospective nature of the rise imposed an unfair penalty on tour operators and suggesting APD is illegal under the Chicago Convention that regulates air travel.
The trade was forced to pick up a £50 million bill to cover the extra APD on holidays booked before the rise was announced.
Lord Justice Stanley Burnton expressed sympathy with the FTO case in his ruling.
He agreed the Treasury failed to consider the financial impact on operators, agreed the tax was retrospective despite Government denials, and said it would have been relatively simple to exempt existing bookings from the hike.
However, Lord Justice Burnton ruled that Article 15 of the 1944 Chicago Convention, at the core of the FTO case, did not prohibit taxes such as APD. He said that in challenging the Government’s right to levy the tax at all, the FTO had placed “a very heavy burden” on the court.
Speaking outside the court, FTO director-general Andy Cooper said: “We are very disappointed, but we hope to find a way around this.”
TUI Travel chief executive Peter Long said: “We don’t agree with the judgment and are considering grounds on which to appeal either in the UK or to the European Court.”
The company said Government lawyers failed to produce an adequate argument as to why the Treasury ignored the constraints on tour operators.