Ryanair CEO Michael O'Leary strongly criticized the UK government's proposed increase in Air Passenger Duty (APD) from April next year, warning that the policy would force airlines to relocate aircraft out of the country and undermine economic growth, particularly in regional UK areas. O'Leary argued that the tax hike, which he estimates would represent a 33% increase on an average Ryanair fare, contradicts the government's stated goal of fostering growth, especially as other European nations are reducing similar environmental taxes. He suggested abolishing APD outside London to stimulate regional traffic, threatening that Ryanair would consider moving planes to countries with more favorable tax policies if the increase proceeds ahead of the Autumn Budget.
Ryanair CEO Michael O'Leary has vehemently criticized the UK government's proposed Air Passenger Duty (APD) increase, effective April next year, which includes a 50% raise for private jets and general increases for other flights. O'Leary warns this policy will prompt airlines to relocate aircraft from the UK, estimating the increase represents a substantial 33% tax on an average Ryanair fare of £45. He contrasts this with other European nations like Sweden and Hungary, which are reducing similar environmental taxes to stimulate economic growth. The government aims to boost public finances and encourage sustainable travel, with APD projected to generate £4.7 billion by 2025-2026. However, O'Leary disputes the Treasury's assessment of APD's impact on ticket prices and proposes abolishing it outside London, arguing a £2 billion budget impact would be offset by increased consumer spending and VAT. His strong rhetoric suggests a significant operational challenge for airlines operating in the UK. O'Leary's threat to move aircraft to countries with more favorable tax policies, such as Sweden or Italy, introduces a tangible risk to Ryanair's UK capacity and future growth in the region. Despite these warnings and a "moderately negative" sentiment signal for the general situation, Ryanair shares (RYAAY) traded 3% higher on Monday morning, reversing earlier losses, indicating investors may be weighing the company's strong first-half profit against the UK-specific tax concerns.
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Overall Sentiment
moderately negative
Sentiment Score
-0.50
Ticker Sentiment
