The Government has voiced its concern about airlines separating out Passenger Service Charges as a tax following protests from ABTA and the Guild of Business Travel Agents.
In a letter to the GBTA, under secretary of state for transport Glenda Jackson said her department was working with the Department of Trade and Industry to assess whether airlines were breaching trade description legislation.
“I understand that the Office of Fair Trading is also considering whether the addition of PSC may be in breach of the unfair consumer contracts legislation,” she added.
GBTA chairman Don Lunn said the response was promising. “This is the first admission by the Government that airlines may be taking advantage of PSC but the battle is by no means over,” he said.
But Lunn said it was disappointing the Government had not replied until now.
He said instead of adjusting the fares accordingly, airlines are simply adding the PSC.
The guild’s calculations show airlines stand to receive over £120m a year from separating out PSC – just from flights out of Heathrow.
Lunn added: “The sheer gall of the airlines in charging twice for the same thing is only exceeded by the boldness of the spurious excuses created for it. Many airlines are quite blatantly calling it a tax, which it clearly is not.
“In fact, so inaccurate is the information being passed on by airlines to clients and agents, that the BAA and Airport Operators Association have had to issue statements refuting the airlines’ claim that UK airports have introduced a new tax.”