Major airlines warn Rachel Reeves against tax hikes in Budget

Two major airline companies have warned the Chancellor against raising taxes on the sector in the upcoming Budget. Senior officials from Ryanair and Wizz Air are warning increases will lead to carriers moving planes out of Britain as they brace for a further increase to Air Passenger Duty (APD).

The UK already has the highest APD in the world, with the tax following a band structure with rates varying depending on destination and class of travel. Airlines must pay for the duty which is reportedly at record high levels. Rachel Reeves is expected to raise taxes and cut spending in her Budget on November 26 as she looks to fill a black hole in public finances estimated to be between £20 billion and £50 billion.

Chief executive of Ryanair, Eddie Wilson, said increasing APD rates would lead to the airline using less new planes on UK routes.

He told the Financial Times that the company has cut some services from Newquay, Cornwall, in favour of Sweden where the duty has been abolished.

He said airlines are the "most mobile investment in the world", adding: "But the dull grey people in the Treasury don't see that, they think the aeroplanes are just there.

"It means the decision to allocate growth won't go where you have rising taxes."

Michael Delehant, chief operations officer at Wizz Air, also expressed concerns and warned there is a good chance Britain's aviation industry "could be very growth stunted".

Also speaking to the FT, he referenced how Wizz Air recently moved aircraft from Vienna, Austria, to nearby Bratislava in Slovakia due to rising airport costs.

He said: "When you're at the price sensitive part of the chain, you have to and you can't just accept [higher prices].

"Vienna was the perfect example. That's your case study."

The Government updates APD rates annually.

The Office for Budget Responsibility estimates the levy will raise £4.5 billion for the public purse in 2025-26.