The Federation of Tour Operators will resume its challenge to the Treasury over air passenger duty in the Court of Appeal on Thursday.
The FTO will challenge a High Court ruling last September that dismissed its case against the doubling of air passenger duty in February 2007 and seek £50 million in compensation for the way the increase was introduced.
Tour operators were forced to pick up the £50 million bill to cover the extra APD on holidays booked before the rise was announced after the Treasury refused calls to exempt the travel trade. Airlines were able to bill passengers for the increase in tax, but tour operators were legally prevented from doing so.
Lawyers for the FTO will argue the Treasury unfairly penalised the trade and demand compensation under European human rights legislation.
In the High Court ruling, Lord Justice Stanley Burton agreed the Treasury had failed to consider the impact of the tax increase on tour operators and said it would have been simple to exempt existing bookings – rejecting the Treasury’s argument that it took tour operators’ situation into account.
FTO director-general Andy Cooper said: “Our case is simple – that there was a way to remedy the situation and the Treasury did not do so.”
The FTO has decided not to pursue its wider claim, rejected by the High Court, that APD is illegal under the 1944 Chicago Convention which underpins global aviation.