Michael O’Leary, CEO of Ryanair Holdings Plc, during a press conference in London, United Kingdom, Wednesday, August 27, 2025.
Bloomberg | Bloomberg | fake images
Ryanair Chief Executive Michael O’Leary on Monday admonished the UK government for its push to increase taxes on passenger flights, warning that the policy will lead to airlines taking planes out of the country.
Speaking to CNBC’s “Europe Early Edition” after reporting a significant rise in first-half profits, the outspoken chief executive described the Labor government’s push to raise taxes on air travel as contrary to its strategy of boosting economic growth.
His comments come ahead of the UK government’s highly risky Autumn Budget on 26 November, with Finance Minister Rachel Reeves under pressure to solve a fiscal conundrum over spending, taxes and borrowing.
Ryanair’s O’Leary said there was a trend for European governments to reduce “insane environmental taxes” and subsequently be rewarded with extraordinary economic growth.
“So we see markets like Sweden, Hungary, Italy and Croatia abolishing environmental taxes and then we have laggards, like Germany, France and Rachel Reeves here in the UK, talking surprisingly about wanting growth and at the same time raising taxes on air travel, on an island, on the periphery of Europe,” O’Leary told CNBC’s Silvia Amaro on Monday.
“Which again confirms my belief that Rachel Reeves has no idea how to deliver growth despite us writing to her offering significant growth, particularly in the UK regions,” O’Leary said.
A Treasury spokesperson was not immediately available for comment when contacted by CNBC on Monday morning.
The chief executive of Europe’s largest low-cost airline highlighted Britain’s air passenger tax (APD), referring to a per-passenger tax on flights leaving the UK to domestic and international destinations.
In last year’s Autumn Budget, Reeves announced strict rules limiting the government’s room for maneuver on spending and borrowing, with day-to-day government spending funded by tax revenues rather than borrowing.
As part of a broader push to boost public finances and encourage more sustainable travel options, Prime Minister Keir Starmer’s government intends to increase APD fares from April next year, with a 50% increase for private jets and across-the-board increases for other flights.
The APD is undoubtedly a major source of government revenue: the Office for Budget Responsibility estimates revenue of £4.7 billion ($6.18 billion) in 2025-2026. Meanwhile, aviation is known to be one of the fastest growing sources of greenhouse gas emissions.
Chancellor of the Exchequer Rachel Reeves speaks on stage during the Labor Party conference on September 29, 2025, in Liverpool, England.
Ian Forsyth | fake images
O’Leary said the government’s plan to increase APD from April next year would amount to a tax of almost 33% on the average price of a Ryanair flight, which he said was around £45.
“It’s ridiculous,” O’Leary said. “For a family of four, it becomes prohibitive. We wrote to Rachel Reeves when she was first elected and said we can offer you 50% traffic growth, not in London, but in the regions of the UK, where they really need growth in those red-walled seats, in Birmingham, Manchester, Glasgow, Edinburgh, Bristol.”
He added: “Just abolish APD outside London. You know, London is full, London can pay APD, but abolish it outside London. It would cost them about £2bn of their budget, they would recover it in extra consumer spending, VAT on extra visitors on consumer spending within a year. There’s no answer.”
“They can’t even do their own calculations”
Asked if Ryanair had held further talks with the Treasury ahead of the autumn budget, O’Leary said: “No, they are hopeless.”
“We got a stupid letter from No 11 saying, ‘oh, a £2 increase in APD is only 1% of the average ticket price’. Now, I don’t know where they buy their tickets, but our average ticket price is £45, so a £2 increase is a 5% increase. They can’t even do their own calculations… They’re useless,” O’Leary said.
If Reeves raises APD again in the autumn budget, Ryanair’s chief executive said the company would consider moving planes to countries that reduce their environmental taxes, naming Sweden, Hungary and Italy as potential options.
Ryanair’s share price ended Monday’s session preliminarily higher, having advanced almost 4%.
— CNBC’s Silvia Amaro contributed to this report.
