Michael O’Leary, CEO of Ryanair, has called on the UK to suspend its passenger tax—called an Air Passenger Duty—for two or three years until air traffic returns to pre-Covid levels.
Airlines have campaigned for years for an end to the tax, which varies with distance, saying it’s an unfair burden especially on low-income families flying together. Over the years it has gradually been lowered to a fraction of what it was and now adds £16 to short-haul tickets and more to longer flights.
O’Leary, head of Europe’s largest budget airline, said that “…by relieving that egregious and regressive tax, particularly on ordinary families, it would enable a very quick return in traffic volumes between the UK and Europe.” At the same time, he warned that airfares may rise over the next few years because of loss of capacity from airlines that folded during the pandemic. He estimated that there will be between 15 and 20 million fewer seats a year available between the UK and Europe for the next two to four years.
A government spokesperson rebutted the idea of dropping APD, saying it “is the UK government’s principal tax on the aviation sector, since tickets are VAT free and aviation fuel incurs no duty. Its primary objective is to ensure that airlines make a fair contribution to the public finances. Revenue raised by APD funds vital public services for people and families across the UK.” The tax raised £3.9 billion in 2019-20.
Nevertheless, there are reports the government is considering lowering APD, at least for domestic flights, and is looking at making a closer correlation between length of flights and amount of APD.
