Ryanair may cut UK flights if aviation taxes rise, warns CEO Michael O’Leary.
- Ryanair’s CEO cautions that increased Air Passenger Duty (APD) could drastically affect passenger demand.
- Domestic routes in the UK are at risk of becoming financially unviable due to potential tax hikes.
- The Chancellor’s budget proposal could impact Ryanair’s growth and investment plans in the UK.
- Ryanair is closely monitoring government decisions on taxation, affecting aviation and tourism sectors.
Ryanair has issued a warning regarding potential reductions in its UK flight operations if the Chancellor, Rachel Reeves, opts to increase aviation taxes in the upcoming budget. CEO Michael O’Leary emphasised the detrimental impact that higher Air Passenger Duty (APD) could have on customer demand, particularly on domestic routes, which are already operating with marginal profitability. O’Leary expressed concern over the potential for these routes to become economically unfeasible, stating that any increase in APD would inevitably lead to a reduction in flight capacity.
Currently, the APD on internal flights stands at £7. O’Leary has described this tax as “a penal tax on the poor,” underscoring the disproportionate burden it places on ordinary passengers. The airline has been expanding its capacity in regional UK airports such as Glasgow, Edinburgh, and Belfast, yet fears that increased taxes may undermine these investments and deter tourism.
Ryanair’s strategic emphasis on growth in the UK aviation sector is tied to post-Brexit economic opportunities. O’Leary has advocated for pro-growth policies that could stimulate inward tourism and contribute to economic benefits. He drew parallels to Ryanair’s recent actions in Germany, where the airline reduced capacity by 12% in response to higher taxes, indicating a willingness to reallocate resources if necessary.
While the government has yet to finalise its stance on APD adjustments, O’Leary stated that judgments would be reserved until Chancellor Reeves’ proposals are revealed. The CEO highlighted positive developments concerning airport expansion but called for concrete, pro-growth policies beyond rhetoric.
O’Leary also discussed broader trends in Europe, where countries like Sweden and Ireland are moving away from aviation taxes to enhance competitiveness. Furthermore, he pointed out the challenges Ryanair faces with delayed aircraft deliveries from Boeing, which could result in flying 5 million fewer passengers than planned in the next year. Despite these obstacles, the airline remains optimistic about reaching a target of flying 210 million passengers by 2025.
Ryanair’s future operations in the UK hinge on upcoming government decisions regarding aviation tax policies.
