Ryanair CEO Michael O'Leary Condemns Air Passenger Duty Increase
Ryanair CEO Michael O'Leary has launched a scathing attack on Chancellor Rachel Reeves' decision to raise Air Passenger Duty (APD), labeling the tax hike as "another monumental stupidity from Rachel Reeves." The budget airline boss made his comments as the increased rates came into effect today, affecting all passengers traveling on flights to and from UK airports.
Regressive Tax Harming UK Competitiveness
Appearing on Sky News Mornings with Ridge and Frost, O'Leary declared: "APD is the most regressive tax there is. Air travel and tourism is one of the fastest, responds very quickly to increases in tax or reductions in tax and the UK is flying in the face of most of the rest of Europe." He pointed out that many European countries have "abolished aviation taxes altogether" while the UK is increasing them.
O'Leary continued his criticism, stating: "Rachel Reeves is increasing them and I think it plays to the same reality, unfortunately, that Rachel Reeves talks about growth but hasn't a clue how to deliver it." The Ryanair CEO revealed that his airline had sent a proposal to the Chancellor when she was first elected two years ago, promising to increase UK operations by a third over three years if APD was abolished, particularly at regional airports.
Detailed Breakdown of APD Increases
The tax, which is typically included in ticket prices and based on distance and class of travel, has seen significant increases across all categories:
- Economy short-haul journeys will see a £2 increase
- Long-haul flights have been hit with a 13% rate increase
- Band A destinations (EU and European Economic Area) will pay £15 APD for economy class, up from £13
- Higher classes on Band A routes rise from £14 to £16
- Private jets for Band A destinations increase to £142, from £84
- Band B spots (long-haul routes like America, Maldives, Costa Rica) see economy APD rise from £90 to £102
- Private jets on Band B routes increase from £647 to £1,097
- Higher classes on Band B routes increase from £126 to £244
- Destinations including Australia, Japan, New Zealand, Vietnam and Thailand see economy rate increase from £94 to £106
- Higher classes on these routes rise from £224 to £253
- Private jets to these destinations increase by nearly 50% - from £673 to £1,141
Industry Concerns Over Economic Impact
Last month, Clive Wratten, boss of the Business Travel Association, raised serious concerns about the impact on business travellers. He described the APD increase as a "major barrier to global connectivity" and noted that "the UK already has the highest air departure tax in the world."
Wratten added: "Despite generating £4.195bn in 2024/25, the tax continues to rise across both domestic and international routes, increasing by 13% and not aligned with inflation. These increases are a hidden squeeze on travellers that often goes undiscussed - especially when APD doesn't even offset the ever-rising and highly controversial airport drop-off fees."
The BTA boss described APD as an "upfront hurdle" for business travellers, including people serving "vital frontline roles," and bluntly stated: "Call it what it is: a tax on the connectivity that keeps our economy moving."
Government Revenue Projections and Criticism
The levy is set to increase by a maximum of 15% per person in April, with further plans to raise APD in April 2027. The Office for Budget Responsibility (OBR) predicts the latest increase will generate a staggering £5.2 billion for the exchequer by 2027, compared to £4.6 billion this year. By the end of March 2028, OBR forecasts expect the newly-increased tax to generate £5.6 billion.
However, industry leaders have strongly criticized the move. Willie Walsh, Director General of the International Air Transport Association, previously blasted the APD increase as a "short-sighted cash-grab" that could damage the UK's aviation sector and broader economy.
O'Leary emphasized the particular impact on regional airports, stating: "Maybe not abolish APD at the London airports, but certainly at the non-London, the regional airports, who are being asked to pay the same rate of APD as the rich London airports, is incredibly stupid."
