Ryanair boss Michael O’Leary claimed Rachel Reeves “hasn’t a clue” about how to generate growth in aviation.
Mr O’Leary said the Chancellor should scrap air passenger duty (APD) rather than “waffle on” about Heathrow expansion, which he described as “a dead cat” that would not happen before the 2040s at the earliest.
In her budget in October 2024, Ms Reeves announced increases in APD from the 2026/27 financial year.
For passengers travelling in economy on a short-haul flight, this will raise APD from £13 to £15.
The thing that will deliver growth is abolishing APD
At a press conference in London on Wednesday, Mr O’Leary said: “The UK continues to lose out on enormous growth opportunities because you have a Chancellor who hasn’t a clue about how to deliver growth, has had five years to get ready for it, and yet has managed to screw it up in her first budget.”
He added: “Nothing is designed to damage growth faster than increasing taxes on air travel.”
Mr O’Leary described APD at £15 as “insane” as it represents “a rate of tax of 33% on Ryanair’s average ticket price”.
Ms Reeves announced earlier on Wednesday that she is supporting a third runway being built at Heathrow, saying the Government is “inviting” the airport to bring forward proposals.
Mr O’Leary said: “The third runway at Heathrow is a dead cat.
“If it ever arrives, it will be about 2040, 2045 or 2050, in fact long after I’ve departed from Ryanair.
“It will not deliver any growth.
“The thing that will deliver growth is abolishing APD.”
He went on: “Here’s the prize we’ve offered to Rachel Reeves.
“We deliver about 60 million passengers a year to the UK.
“Within five years, we could grow that by 50% to 90 million passengers, and all she has to do is abolish APD.”
This would cost the Government £4 billion which would be “paid back two-fold within 12 months” because of growth in passengers, he said.
