Ryanair is poised to reduce its flight operations in the UK, contingent upon potential tax hikes proposed by Chancellor Rachel Reeves. The airline’s CEO cited increased taxes as a threat to passenger demand and route profitability. Domestic flights are especially vulnerable, according to company statements, which warn of economic unviability under higher taxes. The aviation and tourism sectors could be key to post-Brexit growth. Operational challenges also loom due to delayed aircraft deliveries.
Ryanair has issued a stark warning regarding the potential impact of increased aviation taxes in the UK, proposed by Chancellor Rachel Reeves to address a £22 billion budget shortfall. The airline’s CEO, Michael O’Leary, specifically highlighted that any increase in Air Passenger Duty (APD) could substantially reduce passenger demand and render certain domestic routes economically unviable.
Currently, the APD on internal flights stands at £7. However, O’Leary argued that any rise would disproportionately affect ordinary passengers, describing it as “a penal tax on the poor.” He expressed concern that heightened taxes could deter tourism and undermine recent investments in regional UK airports, particularly in Glasgow, Edinburgh, and Belfast, where Ryanair has expanded its capacity.
Ryanair’s stance is underscored by its recent actions in Germany, where a similar tax increase led the airline to slash 12% of its capacity, illustrating its readiness to relocate aircraft across Europe when routes are no longer profitable.
O’Leary emphasized the potential of aviation as a catalyst for economic growth in the UK, especially in the post-Brexit era. He advocated for government policies that stimulate tourism and support the aviation sector rather than imposing punitive taxes.
Furthermore, Ryanair is currently grappling with operational challenges due to delays in aircraft deliveries from Boeing, which is expected to result in 5 million fewer passengers than anticipated next year. Despite this setback, the airline still projects growth, intending to carry 210 million passengers by 2025, although this is a reduction from its initial target of 215 million.
The aviation industry awaits the Chancellor’s upcoming Budget, which could significantly influence Ryanair’s operations and future growth in the UK.
