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Air tax ‘bigger issue than Brexit or covid-19’ says Ryanair exec

Low-budget airline Ryanair has launched six new routes from Birmingham Airport but the head of its commercial team has warned it is unlikely to grow further here unless air passenger duty is suspended or scrapped.

Director of commercial Jason McGuinness told BusinessLive the aviation tax, which is added to tickets for flights from almost all UK airports, posed a greater long-term threat to the health of the UK airline industry than Brexit or the impact of covid-19.

Mr McGuinness also took a swipe at the coronavirus traffic light system which was introduced by the Government for passengers returning to the UK from abroad, with countries assigned a status of red, amber or green based on factors such as covid case numbers.

Reports in recent days have suggested the Government is planning an overhaul of the current system.

Mr McGuinness was speaking to BusinessLive as the Irish airline announced it was launching six new European routes for this winter from Birmingham Airport which are due to commence in October and take the carrier’s total there up to 28.

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He said: “The UK is at a disadvantage compared to mainland Europe because of two issues – the traffic light system and air passenger duty (APD).

“The traffic light system is not fit for purpose. I have worked in aviation for 15 years and I couldn’t explain it – it’s creating utter chaos.

“UK APD is by far the highest aviation tax across Europe – it will become a bigger issue than Brexit and the long-term impact of covid-19.

“Take Italy as an example where they have abolished their equivalent tax, which was much lower to start with anyway, to drive the recovery.

“There is going to be substantial reduction in capacity among European airlines over the next few years and this has already been seen in the Midlands among firms such as Monarch, FlyBe and Thomas Cook.

“So there is now competition for capacity unlike anything I have ever seen from airports across Europe.

“So many people and industries, not just airports themselves but hotels and hospitality, depend on aviation and inbound tourism and staycations alone will not solve the problems for UK tourism this winter. That just won’t happen.”

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The cost of ADP is based on the distance of a flight from London and starts at £13 but can be more than £500 in some instances and only a handful of other European countries impose such a tax.

There have been repeated calls from the industry for it to be scrapped, or at least suspended, including from Mr McGuinness’ chief executive Michael O’Leary while speaking at a Commons Transport Select Committee in June.

Earlier this year, Prime Minister Boris Johnson hinted that he wanted to cut APD on UK domestic flights.

The sextet of new Ryanair routes out of Birmingham are to Bergamo, Lisbon, Shannon and Vilnius all twice weekly, Bucharest four times a week and single weekly service to Turin.

There will also be four Ryanair aircraft based at Birmingham Airport.

Although these new routes have been initially launched for this upcoming winter, Mr McGuinness, who has been with the airline since 2007, said he expected them to continue through next year.

“We are putting our summer 2022 schedule together at the moment and we will have close to 2,000 routes,” he said.

“The majority of these six new ones will continue on into summer so it’s very good news for Birmingham.

“We have been recovering well strongly across Europe and have gone from one million passengers in April this year to more than 11 million in August.

“Birmingham is a very big market for us. Pre-covid, we had about 2.2 million passengers a year in Birmingham and without APD there’s no reason Ryanair could not double those numbers, rising to eight to ten aircraft and five million passengers.

“But with APD, that’s just not going to happen. We have four planes based in Birmingham but in the short and medium term, that is unlikely to grow further.”

Tom Screen, Birmingham Airport’s aviation director said the expansion by Ryanair was “fantastic” following the challenges of the past 18 months.

“This is helping to grow consumer confidence in flying overseas again and supporting the recovery of air travel,” he said.

“These six new destinations starting this winter will give more choice and flexibility for Midlanders looking for a break in Europe.

“We are incredibly grateful to Ryanair for continuing to grow its Birmingham base and for having confidence in our region.”

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