Jet2 boss slams Rachel Reeves and issues summer holidays price warning | UK | News
Rachel Reeves has been warned that using the holiday industry as a “cash cow” will push prices through to customers in a predicted economic hit. Steve Heapy, CEO of Jet2, the UK’s largest holiday company, said that tax increases applied to air travel and package tour operators will increase passengers’ costs. This comes ahead of the highly anticipated Autumn Budget on 26 November, when Chancellor Rachel Reeves is expected to announce tax, borrowing and spending plans for next year.
Labour’s increases in Air Passenger Duty (APD) for flights and employer National Insurance contributions have sparked uncertainty in the travel industry, and bosses fear measures to be announced next week will increase pressure on the industry. “I would ask the government not to continue using the airline and holiday industry as a cash cow and a bottomless money pit,” Mr Heapy said.
“Any additional taxes in the airline and leisure industry will inevitably be passed on to customers, which will increase prices,” he said. Telegram.
“You can’t escape the basic laws of economics, and rising prices can lead to reduced demand. That’s not good, because people who can’t afford holidays will be the lowest-earning members of society.”
Mr Heapy warned such an outcome would be “perverse” and dismissed air holidays as “something reserved for the rich and privileged”.
He added that many Jet2 customers “work 50 or 51 weeks a year and value their holidays”.
Increases in APD will come into force next April, including a £2 tax increase for short-haul international flights, an £8 increase for domestic flights and a £12 increase for longer international journeys.
But bosses, including Mr Heapy and Ryanair chief executive Michael O’Leary, have been prepared for the possibility of further passenger tax increases; This could force operators to move operations from smaller airports in the UK to economies with lower business rates, Mr O’Leary said.
Ryanair CEO told Guard: “I have little confidence in Rachel Reeves or the Labor government’s current economic strategy… I think you’ll see modest price increases throughout 2027 and 2028, not just at Ryanair but across airlines.”
Treasury spokesman said: “Unlike other sectors, VAT is not applied to flight tickets and [APD] The changes will add just £2 to a family of four flying to Spain.”
