Ryanair Holdings Plc Chief Executive Officer Michael O’Leary slammed the UK government for its decision to increase the air passenger duty, saying the move will sabotage growth and prompt Europe’s largest low-cost airline to shift operations to more accommodating countries like Italy or Sweden.
The outspoken CEO said the new Labor government is “bonkers” for pledging first to support the economy and then raising travel levies just months after coming to power.
“The UK has no chance of growing if this idiot chancellor thinks that the way forward is going to be increasing tax on air travel,” O’Leary said on Monday in an interview on Bloomberg TV after the airline reported earnings. “You’ve got to be insane to do that.”
A Treasury official said that no value-added tax applies to plane tickets “and there is no tax on jet fuel, the changes to the APD rate will only add £2 for a family of four flying economy to Spain with under 16’s exempt.”
As a result of the measure, the Irish airline plans to redeploy capacity for five million passengers from the UK into other markets that are cutting back on aviation tax, including Hungary, Sweden and Italy, O’Leary said.
UK Chancellor of the Exchequer Rachel Reeves announced in her budget last week that air passenger duty for short-haul economy flights would increase by no more than £2 ($2.60) per passenger. O’Leary said the measure will be more pronounced as other countries cut back, meaning the difference will be closer to £10.
Asked if he’d spoken to Reeves since the announcement, O’Leary said he’d not had contact with the chancellor.
“I suspect the chances of me having a conversation with her in the next couple of weeks are diminishing rapidly,” O’Leary said.