Ryanair’s CEO has accused the chancellor of having no idea how to grow the UK economy over the government’s push to raise taxes on passenger flights.
Michael O’Leary warned that the policy will see airlines move planes out of the country.
His comments come ahead of the Autumn Budget on November 26, where Finance Minister Rachel Reeves is under mounting pressure to plug a multibillion-pound gap in the public finances.
It comes as budget airline Ryanair reported a 42 per cent rise in half-year profits.
From the last six months up to the end of September, the company made a £2.2billion profit after tax.
A record 119million passengers travelled with the airline in the first half of the year.
Revenues per passenger saw an increase of 9 per cent across the six months.
On top of that, a 13 per cent increase in baggage fees, seat selection charges and higher fares helped.
Budget airline Ryanair reported a 42 per cent rise in half-year profits
O’Leary said there had been a trend of European governments rolling back ‘mad environmental taxes’ and subsequently being rewarded with bumper economic growth.
‘So, you see markets like Sweden, Hungary, Italy and Croatia abolishing environmental taxes and then you have the laggards, like Germany, France and Rachel Reeves here in the UK, remarkably talking about wanting growth and yet increasing taxes on air travel — on an island, on the periphery in Europe,’ he told CNBC on Monday.
Air Passenger Duty (APD) is a type of departure tax on flights leaving from UK airports. The cost is usually passed on to the passenger and is included in the ticket price, and APD raises revenue for the UK government.
As part of a push to boost public finances and encourage more sustainable travel options, Keir Starmer’s government intends to increase APD rates from April next year, with a 50 per cent rise for private jets and general increases for other flights.
O’Leary called for the hike, revealed at Reeves’s first budget last October, to be reversed in her speech to the Commons on 26 November.
He said the government’s plan to raise the APD would represent a tax of almost 33 per cent on the average price of a Ryanair flight, which he said was about £45.
He called for an abolition of APD outside of London.
‘It would cost them about 2billion of their budget, they would get that back in additional consumer spending, VAT on additional visitors on consumer spending within one year,’ he said.
Ryanair’s CEO has accused the chancellor of having no idea how to grow the UK economy over the government’s push to raise taxes on passenger flights (file image)
O’Leary went on to describe the government as ‘hopeless’.
‘They can’t even do their own maths. They’re useless,’ he added.
If Reeves increases APD again in the Autumn Budget, Ryanair’s CEO said the company would consider moving aircraft to other countries.
A Treasury spokesperson told the Daily Mail: ‘Unlike other sectors, no VAT applies to plane tickets, and these changes will add just £2 for a family of four flying economy to Spain.’
Share or comment on this article:
Ryanair boss blasts ‘hopeless and useless’ UK government over travel tax
Source link
CHECK OUT: Top Travel Destinations
READ MORE: Travel News
