Airline CEOs Urge Labour Government to Cut Flight Taxes

Airline executives are urging the Labour government to reduce or freeze Air Passenger Duty (APD), often referred to as the 'holiday tax,' ahead of the upcoming budget. The CEOs of easyJet, British Airways, and Ryanair have voiced concerns that current tax levels are hindering growth and making travel unaffordable for families.

Ryanair CEO Michael O'Leary criticized the government's approach, labeling it a "typical Labour f***ing tax and spend government." He argued that increasing air travel taxes contradicts the pledge for "good growth in every postcode" and warned that similar policies in other European countries have led to economic stagnation. O'Leary also condemned proposed plans for a new tourist tax on domestic hotel stays, calling it a "loony plan" for double taxation.

EasyJet CEO Kenton Jarvis echoed these sentiments, stating that flying should remain accessible and affordable, especially amidst a cost of living crisis. He noted that APD already increased in April, forcing airlines to pass on higher costs to consumers. Jarvis called for APD to be frozen and ideally reduced, emphasizing that current levels are already among the highest globally.

Travellers paid a record £4.6 billion in APD for the 2025-26 year, an increase of nearly 12% from the previous year, according to HMRC data. The levy on flights out of the UK was raised by an inflation-busting 15% in the 2024 Budget, a move that has led to increased tax bills for families. For a family of four traveling economy to some destinations, the tax burden this summer exceeded £400 for the first time. For longer journeys to destinations like Dubai or Florida, the tax can reach nearly £1,000 for premium economy tickets.

APD is structured in a three-tier system based on flight distance. For flights up to 2,000 miles (most European destinations), the tax is £15 per passenger in economy and £32 in premium economy. For journeys up to 5,500 miles, it's £102 or £244, and for longer flights, it's £106 or £253. The tax is applied to outbound flights from UK airports and is generally passed on to passengers. Children under 16 traveling economy are exempt.

Additionally, the industry is concerned about new powers being granted to regional mayors to introduce a levy on hotel stays, which some hospitality leaders fear could jeopardize jobs. While some Labour mayors plan to cap this 'tourist tax' at 5%, other mayors from different parties have indicated they will not utilize these powers.