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EDITIONS
Wednesday, 30 October, 2002, 18:33 GMT
Row looms over cheaper air duty
Family of four
Some families might lose out if they booked early

A family of four should see their air tickets reduced by at least 60 from 1 November on a range of European routes.

People flying from UK airports to European Economic Area countries have already enjoyed a reduced rate of Air Passenger Duty (APD) - and this will now be extended to 14 other countries.

The new reduction, which was announced in April's Budget, will mean that travel to holiday destinations such as Cyprus, Turkey, and Malta, will incur tax of 5 per economy seat and 10 for a premium seat.

Previously, the tax was more than double that.

The UK Treasury estimates four million passengers a year should benefit from the reduction.

But while it is good news for travellers, it has emerged that not everyone who booked prior to 1 November will get the reduction.

Policies differ widely between travel agents, airlines and tour operators as to whether they will refund the difference in duty.

The Consumers' Association believes that the companies should at least offer refunds to people who booked their holidays prior to the announcement on 17 April 2002.

Rule change

Air Passenger Duty was introduced in the Finance Act 1994.

The duty is levied by the government on flights leaving any UK airport.

Customs & Excise told BBC News Online that the tax is incurred at the point of take off, rather than when the ticket is sold.

"Any money that a passenger may have paid over... may be reclaimable, but obviously that is a matter for them to explore with the airline or their insurers, because we don't actually levy it with the passenger we levy it on the airline."

Which countries will now qualify for the European rate?
Bulgaria
Latvia
Slovak Republic
Cyprus
Lithuania
Slovenia
Czech Republic
Malta
Switzerland
Estonia
Poland
Turkey
Hungary
Romania

Under the old rules, travel outside the European economic area incurred a more expensive charge of 20 for economy and 40 for business or first class.

The Chancellor's announcement brought in a whole host of European Union applicant countries, along with Switzerland, into the lower duty bands (see list right).

This means that someone flying to Malta, for example, from the UK in economy class will now pay only 5 air passenger duty compared to 20 previously - a saving of 15.

Dispute brewing

Many of the major tour operators are not offering refunds.

Alan Flook, secretary general of the Federation of Tour Operators, whose organisation represents some of the biggest tour operators, said there was nothing wrong with refusing to refund.

"Prices are guaranteed prices - they don't go up and down. When you have signed the booking form those prices are guaranteed.

"Whether they have been discounted or not discounted that is the price you have paid."

Thomson, one of the major tour operators that is refusing to refund, has already written to customers outlining its position.

A spokesman said only a small number of its customers would be affected, because the summer brochures which were on the shelves since May take into account the differences.

She said it was "swings and roundabouts".

"We don't charge extra if fuel prices go up," she added.

Consumer anger

But Bob Tolliday of Holiday Which? told BBC News Online that people who booked their holidays before April 2002 should get a refund.

"This is a tax. It is not something they can keep.

"They are always encouraging people to book in advance but they are going to penalise people."

"If you book before April you should get the money back - it is as simple as that."

Getting a refund?

Consumers may wish to know if they are receiving a reduced rate of duty.

It is not a legal requirement for companies to itemise air passenger duty on an airline ticket, according to the Civil Aviation Authority.

But often companies do.

Air Malta and British Airways both say that they will refund the difference if someone has been overtaxed on tickets bought directly from them.

BA said it would offer refunds to people who booked tickets prior to June.

Customers should be able to see on their ticket if they have been charged too much.

But people might not get the refund until after they have taken their flight.

Travel agent Trailfinders said that it would offer refunds to its customers, if it had not yet paid the airline for that ticket. This is called issuing the ticket.

It said customers could find out the position by contacting Trailfinders.

If the ticket had been issued the customer would have to seek a refund from the airline.



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17 Oct 02 | Business
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