‘Scrap Air Passenger Duty to save aviation,’ urges Ryanair boss

Michael O’Leary warns of higher European air fares for up to four years

Hard times: Ryanair and all other European airlines have seen demand collapse during the coronavirus pandemic (Simon Calder)

The chief executive of Europe’s biggest budget airline has called for Air Passenger Duty (APD) to be suspended for two to three years until “traffic levels return to pre-Covid normal”.

Speaking to MPs on the Transport Select Committee, Michael O’Leary said: “Aviation has been devastated much harder and for much longer than almost any other industry.

“Most of the airlines and airports have seen a 90 per cent reduction in traffic over the past 12 months.

“We’re not looking for more subsidies. What we need is incentives to get people back travelling.”

He called for Air Passenger Duty (APD) to be suspended for two to three years.

Currently passengers aged 16 or over departing on short-haul flights from UK airports pay £13 in tax.

The government says: “APD is the UK government’s principal tax on the aviation sector, since tickets are VAT free and aviation fuel incurs no duty.

“Its primary objective is to ensure that airlines make a fair contribution to the public finances.

“Revenue raised by APD funds vital public services for people and families across the UK.”

The tax raised £3.6bn in 2019-20.

Mr O’Leary said of a temporary suspension: “It wouldn’t go to the airlines, it wouldn’t go to the airports.

“But by relieving that egregious and regressive tax, particularly on ordinary families, it would enable a very quick return in traffic volumes between the UK and Europe.”

The Ryanair chief executive also warned air fares compared with pre-crisis levels would be higher for the next few years – partly because of airline collapses before the coronavirus pandemic took hold.

“When restrictions are finally lifted, Thomas Cook no longer exists: that’s four million seats gone. Flybe no longer exists: that’s six million seats gone.

“Many of the other airlines have reduced their capacity.

“So there is going to be anything from 15-20 million less seats annually between the UK and Europe for the next two, three or four years.

“It is critical, not that the government gives us subsidies, but that they scrap APD for a two to three year period to allow consumers to return and the industry to recover.”

Mr O’Leary was speaking hours after a 12-week consultation on the future of APD ended. The government is looking at a possible cut in tax for domestic flights and a closer correlation between the length of flights and the APD paid.

The Independent has asked the Treasury for a response to the Ryanair boss’s demands.