Steve Heapy, chief executive of Jet2, Britain's biggest holiday firm, has warned that further tax rises on air travel and package tours will hike costs for customers. Speaking ahead of Chancellor Rachel Reeves' Autumn Budget on 26 November, Heapy criticised the government for treating the airline and holiday industry as a 'cash cow'.
Labour's planned increases in Air Passenger Duty (APD) for flights and employer National Insurance contributions have already caused uncertainty in the travel sector. Heapy told The Telegraph: 'I would ask the Government not to continue using the airline and holiday industry as a cash cow and a bottomless pit of money.' He added that any additional taxation is inevitably passed on to customers, driving up prices.
Heapy warned that higher costs could reduce demand, particularly affecting lower-income families. 'It could be that increased prices result in reduced demand. That's not good, because the people who will be unable to afford a holiday will be the lowest-earning members of society,' he said. He described such an outcome as 'perverse', effectively reserving air travel for 'the rich and privileged'.
Increases in APD will come into force next April, including a £2 rise for short-haul international flights, an £8 rise for domestic flights, and a £12 rise for longer journeys. Ryanair chief executive Michael O'Leary also warned of possible further hikes, which could force operators to move from UK airports to lower-tax economies. A Treasury spokesperson countered that no VAT applies to plane tickets and the increases add just £2 for a family of four flying economy to Spain.
