Ryanair CEO again urges UK to scrap Air Passenger Duty

(UNITED KINGDOM) Ryanair chief executive Michael O’Leary on Aug. 27, 2025, renewed his push for the UK government to abolish Air Passenger Duty in 2025, linking the demand to Ryanair’s newly launched UK Winter 2025 schedule and a pledge to expand sharply if the tax goes. O’Leary said the removal of APD would let Ryanair grow UK traffic by roughly a third over five years, lifting annual passengers from about 60 million to 80 million, with gains spread across regional airports as well as London. The airline’s call follows a fresh round of APD increases due to take effect April 1, 2025, set by the Labour government in its Spring Budget and adjusted for recent inflation trends.

The push caps weeks of public pressure. On Aug. 19, Ryanair formally urged Chancellor Rachel Reeves to scrap the £13 APD charged on most short-haul economy tickets, arguing the tax blocks growth, raises prices, and makes the UK less competitive against European markets with lower aviation charges. O’Leary has labeled APD “damaging” and “bonkers,” and warned that, if the tax stays, the airline could shift up to 5 million seats to other countries over the next seasons. He points to markets such as Italy, Sweden, and Hungary as places where capacity can move more easily if costs in Britain stay higher.

The UK government, now led by Prime Minister Keir Starmer and Chancellor Reeves, defends the increase as a measured step that helps public finances and keeps APD aligned with inflation. The Treasury stresses that there is no VAT on airline tickets and no tax on jet fuel in the UK, and says the latest rise is modest for most families. Children under 16 in economy remain exempt from APD, a policy ministers frame as a way to protect family trips while maintaining a revenue source the state relies on.

Ryanair counters that abolishing APD would boost tourism, inbound spending, and jobs, and says the ripple effects would strengthen the wider economy well beyond London. The carrier has submitted formal proposals to the government and says it stands ready to add aircraft and routes in the UK if APD is scrapped. The company’s latest schedule launch was used to underscore that message, with O’Leary claiming abolition would unlock new growth at regional bases and on domestic routes that have struggled to scale.

Market context and passenger impact

The debate lands at a sensitive time for airlines and passengers. Fares are under pressure from fuel costs and broader inflation, while demand for short-haul leisure trips remains strong. For budget carriers like Ryanair, even a £1–£2 change per passenger can alter route economics at the margins.

Ryanair argues cutting APD would:
– Lower prices on entry-level tickets
– Pull in more passengers
– Support more flights, more crew jobs, and more inbound visitors spending money across the UK

That logic relies on price elasticity in short-haul markets: lower taxes → lower fares → more passengers → expanded capacity.

Policy and rates for 2025–26

APD is a per-passenger tax on departures from UK airports. It is charged by distance bands and travel class, with a separate higher rate for large private aircraft. From April 1, 2025, the published rates are as follows:

• Domestic departures:
  • £7 reduced rate (usually economy)
  • £14 standard rate (other classes)
  • £84 higher rate for large private aircraft
• Band A (0–2,000 miles):
  • £13 reduced rate
  • £28 standard rate
  • £84 higher rate
• Band B (2,001–5,500 miles):
  • £90 reduced rate
  • £216 standard rate
  • £647 higher rate
• Band C (>5,500 miles):
  • £94 reduced rate
  • £224 standard rate
  • £673 higher rate

Most UK flyers pay the reduced (lowest) rate because they travel in economy. For short-haul economy, the increase in 2025 is up to £2 per passenger. Under-16s in economy are exempt, so a family with two adults and two children on a Band A return trip would see APD added only for the adults on the outbound leg from the UK.

HM Treasury expects APD to raise about £4.7 billion in 2025–26, which officials say works out to roughly £160 per UK household and about 0.2% of national income. The government presents this as a steady, predictable revenue stream that supports services at a time of tight budgets. While critics describe APD as the world’s highest passenger departure tax, ministers argue that the UK’s broader aviation tax picture—no VAT on tickets, no tax on jet fuel—must be considered as well.

APD applies only on departures from UK airports; it is not charged on the inbound leg to the UK.

Airlines collect the tax within the ticket price, then pass it to HM Revenue & Customs each month based on actual passenger departures. That design makes APD simple for travelers, but passengers often do not notice the tax unless they examine the fare breakdown when booking.

The banded structure was updated in 2023, when a distinct domestic band and an ultra-long-haul band were added, aiming to balance regional travel and climate policies. Rates now adjust annually for inflation.

How APD is collected — step by step

1. Ticket purchase: APD is included in the fare for all departing passengers from UK airports.
2. Airline remittance: Carriers pay APD to HMRC monthly based on the number of passengers who actually depart.
3. Rate selection: The tax depends on distance band, travel class, and aircraft type.
4. Exemptions: Children under 16 in economy are exempt (this exemption does not apply to higher classes).
5. Consultations: Industry groups can respond to policy consultations by emailing [email protected].

Industry reactions and politics

Ryanair rejects the government’s policy stance. O’Leary says every pound added to APD reduces the UK’s ability to compete for new routes and seats—especially when airlines can choose where to grow. He argues scrapping APD would deliver the quickest boost in air traffic and visitor numbers, supporting hotels, restaurants, transport providers, and jobs tied to aviation and tourism.

Industry views vary:
– Heathrow chief executive Thomas Woldbye welcomed the government’s “bold responsible vision” on aviation, but urged broader reforms such as airspace modernization and regulatory changes.
– Business aviation groups warn that steep increases for private aircraft could hit charter operators hard and are preparing coordinated responses. Proposals may expand the highest APD rate to smaller private aircraft.

The Labour government has shown no sign of abolition as of Aug. 28, 2025. Ministers have set the new rates and signaled interest in targeted adjustments, especially on private aviation. Airlines and airports are bracing for another round of debate in 2026 as consultations continue.

Practical effects for travelers, businesses and regions

• For travelers: ticket prices on UK departures include APD, so any increase lands on the final price. The government argues the 2025 rise is modest for most families because of the under-16 exemption.
• For frequent flyers and larger families: cumulative increases across a year are felt, and price-sensitive short-haul customers notice even small changes.
• For small businesses: the domestic rate matters. For example, a sales team flying Manchester–Belfast pays £7 per person on the UK departure.
• For regional airports: airlines say every cost counts. If the UK remains higher-cost on short-haul departures, carriers may shift capacity elsewhere—marginal changes (one aircraft, a few weekly rotations) can add up.

Ryanair’s warning to shift up to 5 million seats is a signal, though the exact impact depends on demand and exchange rates as well as tax policy. Even a partial shift would be visible in capacity charts for secondary UK airports, prompting local leaders to lobby for lower departure taxes.

Example: For a London–Barcelona return in economy for two adults and two children under 16:
– APD applies only on the UK departure and only to the adults.
– With Band A reduced rate at £13 from April 1, 2025, the booking would include £26 in APD total for the UK side.

Environmental considerations

APD is primarily a revenue tool, not a direct emissions policy. Rising departure taxes can nudge demand, and the government often cites climate targets when arguing for steady or higher rates. Simultaneously, it invests in sustainable aviation fuel trials and airspace reforms.

Airlines counter that newer aircraft, fuller planes, and efficient operations deliver more emissions impact than a per-passenger tax that does not reward greener fleets.

What’s next

• The published APD rates for 2025–26 are locked in from April 1, 2025.
• Ryanair’s campaign aims to make abolition a live topic in the next budget round rather than an immediate change.
• Watch for whether other airlines publicly tie growth targets to APD, or prefer quiet lobbying.
• Route announcements, aircraft base decisions, and capacity shifts in winter and early summer schedules will reveal industry confidence.
• Airports chasing new routes will likely favor abolition or a freeze; others may emphasize stability and broader reforms.

Practical tips

• Check the fare breakdown when you book; APD should be listed within taxes and fees.
• Remember APD applies only on the UK departure, not the return to the UK.
• If your children are under 16 and in economy, APD should not be charged for them.
• If your company tracks travel costs, note the APD line and the date change to April 1, 2025, when new rates apply.
• Operators and industry groups: submit consultation feedback to [email protected] before HM Treasury deadlines.

According to the UK government’s official guidance, the 2025–26 APD rates and structure are designed to be transparent and inflation-aware, with clear bands by distance and class. The published details are available on the government website here: Air Passenger Duty rates from 1 April 2025 to 31 March 2026. Ryanair’s campaign is pitched against that settled framework, aiming to make abolition a live topic in the next budget round rather than an immediate change.

The bottom line: APD now sits at the center of a deeper argument about growing UK aviation while raising revenue and meeting climate goals. Ryanair believes the tax holds the country back and says it is ready to expand if it goes. The government believes the current path balances revenue, fairness, and predictability, with targeted protections for families. With no sign of abolition as of late August 2025, the standoff looks set to carry on into the next fiscal year, and passengers will see the new rates in their ticket prices from April 1, 2025 unless policy shifts.