Ryanair warns of 10% UK capacity cut due to tax hike

Ryanair (FR, Dublin International) has warned it may reduce its UK flight capacity by up to 10% in 2025, cutting air travel to and from UK airports by five million passengers, in reaction to the government's announcement of a higher air passenger duty (APD).

During the Autumn Budget 2024 speech on October 30, UK Chancellor Rachel Reeves announced an APD increase of no more than GBP2 pounds (USD2.50) on economy-class short-haul flights. Private jet users will face a 50% hike in APD, which could mean an additional GBP450 (USD579) per passenger on long-haul flights to destinations like California, she said. These increases will come into effect on April 1, 2026.

APD rates vary based on flight distance and cabin class. Current economy-class rates range from GBP7 (USD9) for domestic economy-class flights and GBP13 (USD16.70) for short-haul economy-class seats to GBP607 (USD782) for premium-class long-haul flights. The APD for the year starting April 1, 2025, remains the same for economy-class domestic and short-haul flights but increases between GBP2 and GBP66 (USD85) depending on the distance and class travelled.

From April 1, 2026, passengers will pay GBP8 (USD10.30) on domestic economy-class flights, GBP15 (USD19.35) on economy-class short-haul flights, and up to GBP1,141 (USD1.472) on long-haul premium-class flights.

Ryanair warned that higher air travel taxes would raise the cost of accessing the UK, making it a less competitive destination for tourism and airline investment. The resulting decline in tourism could lead to fewer flights, higher fares, and potential job losses, particularly affecting UK regional airports and domestic flights. It pointed to countries like Ireland, Hungary, Sweden, and various regions in Italy that have abolished air travel taxes to encourage tourism and economic growth.