In a Bloomberg interview, Ryanair CEO Michael O’Leary criticized the UK Labour government’s travel tax hike, calling it a growth barrier. Ryanair plans to redirect five million UK-bound seats to tax-friendly markets like Italy and Sweden. O’Leary warned of potential economic setbacks from these policies.
In an interview with Bloomberg, Ryanair CEO Michael O’Leary sharply criticized the UK Labour government’s recent decision to increase travel taxes, labeling it as counterproductive to economic growth. He argued that while the government was elected on a pro-growth platform, it is implementing policies that he believes will undermine expansion. “This bonkers Labour government…they got elected on this kind of pro-growth motive,” he remarked. “You can’t grow putting on travel taxes.”
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Following the new taxes, Ryanair intends to reduce its capacity to the UK by five million passengers annually, reallocating these flights to markets like Italy, Sweden, and Hungary, where governments are abolishing travel taxes to stimulate growth. “We do about 55 million passenger a year to the UK… We’re going to move that now next year to Italy, Sweden, Hungary,” O’Leary explained. He sees this strategy as a win for Ryanair’s pricing flexibility in the UK but a significant setback for UK growth prospects, he said “…the UK has no chance of growing if this idiot Chancellor thinks that the way forward is going to be increasing tax on air travel.”
O’Leary criticized UK Chancellor Rachel Reeves’ tax approach, warning it will hurt the country’s growth, particularly given that other European nations are reducing travel costs to attract visitors and investment. Countries like Italy and Sweden, he pointed out, recognize the benefits of removing these taxes, and he anticipates the UK will eventually “work it out.” However, he cautioned that the Labour government, being relatively new to power, might have to “learn some very harsh lessons in the next year or two” as the impacts of their policy decisions become evident.
Source: Bloomberg TV