Ryanair warns of consequences of planned increase in air transport tax in the United Kingdom

The UK government is planning to increase the Air Passenger Duty (APD), which will come into force in April 2026. This announcement has already sparked widespread reactions in the aviation industry, particularly from Ryanair, one of Europe's largest airlines.

The Irish low-cost airline has warned in a statement of the possible negative effects: a reduction in flight capacity in the United Kingdom of up to 10% in 2025, which could lead to a drop in passenger traffic of around five million passengers. Ryanair, which has been one of the largest providers of air connections to British airports for years, fears that the increase in the air travel tax would make the country less attractive for travelers and airlines, with potentially serious consequences for British aviation and the economy.

The Planned Tax Increase: An Overview

On October 30, 2024, British Chancellor Rachel Reeves announced the planned increase in the air travel tax in her speech on the 2024 autumn budget. This tax, which has existed since 1994, is to rise by up to 2 pounds (around 2,50 USD) for short-haul flights in economy class. However, private jet flights are particularly affected by the tax increase, for which a drastic increase of up to 50% is expected. This means that long-haul flights to far-flung destinations such as California could incur additional costs of up to 450 GBP (579 USD) per passenger. The planned tax increases not only affect air travel in the UK, but could also significantly increase the price of international flights to and from British airports.

The current air travel tax in the UK varies depending on distance and cabin class. For domestic flights in economy class, the tax is currently £7 (about $9), while short-haul flights in economy class are charged £13 ($16,70). Long-haul flights in premium class can currently cost up to £607 ($782). With the introduction of the new rules in 2026, the tax rates would increase to £8 (about $10,30) for domestic flights in economy class and up to £1.141 ($1.472) for long-haul flights in premium class.

Economic impact of the tax increase

Ryanair was quick to react to the announcement, warning that an increase in the air travel tax would not only increase the cost of entering the UK, but could also make the country less attractive as a destination for international tourism and airline investment. This would subsequently lead to a decline in tourism, which could affect the number of flights and competition among airlines.

Regional airports in the UK in particular could be severely affected by such a measure, as the increased tax would particularly affect domestic air traffic and regional airports. In recent years, British regional airports have already struggled with the effects of Brexit and the Corona pandemic, which led to a decline in passenger numbers. A further burden of higher taxes could threaten the existence of many of these airports. At the same time, passengers would have to expect higher airfares, which could further dampen demand for flights.

International examples: Tax abolition in other countries

In comparison, other European countries such as Ireland, Hungary, Sweden and certain regions of Italy have abolished or reduced their aviation taxes to encourage tourism and economic growth. These countries hope to attract more travelers and strengthen their aviation market by making air travel cheaper. Ryanair points out that by increasing the tax, the UK could jeopardize its competitiveness in the international market, especially in terms of tourist destinations and business travel.

It is also important to note that air transport plays a significant role in the UK economy, particularly through the creation of jobs in the tourism and aviation industries. A decline in air traffic could therefore have a negative impact not only on passenger numbers, but also on jobs and the local economy.

Airports and the Consequences for International Tourism

Another critical aspect of the tax increase concerns international tourism. The UK has become one of the world's most popular tourist destinations over the past few decades, and aviation has made a major contribution to the thriving tourism sector. But the proposed tax increases could make the country less attractive to international travellers, particularly for shorter trips, which traditionally represent the largest target group for low-cost airlines.

Tourism is a significant source of income for many regions in the UK, and a decline in tourism demand could have a profound impact on local economies. British airlines, which have struggled with the consequences of Brexit and the pandemic in recent years, are also under pressure to remain competitive.

Ryanair's strategy: Possible capacity reductions

Ryanair has already announced that it will reduce its flight capacity in the UK by up to 2025% in 10, which would result in a loss of around five million passengers.

The company fears that the tax increase will not only have a negative impact on tourism, but could also lead to a loss of investment and a reduction in flight connections. At a time when air transport is increasingly facing challenges such as the effects of climate change and rising energy costs, a further tax burden could jeopardize the growth of the industry.