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Budget airline calls for further action

Ryanair may prompt price war after early cut in APD

RyanairBudget airline Ryanair may have sparked a price war after deciding to cut air passenger duty (APD) before the new lower rates are introduced in May.

The Irish operator said it will refund APD on children’s fares from 27 March – six weeks ahead of the date when Chancellor George Osborne’s ruling comes into force.

Osborne told the Commons this week that under 12s will not be charged £13 APD from 1 May and under 16s from the following year.

But Ryanair has jumped the gun by announcing it will scrap the charges before the Easter holidays.

The move will cost Ryanair £2 million over the Easter Holiday period but it will hope to be compensated by snatching business from rival airlines.

Ryanair’s Chief Marketing Officer, Kenny Jacobs, said: “While we welcome this partial reduction in APD, we call on the UK Government to abolish APD, and allow UK tourism to return to growth and become competitive once more. Tourist traffic in Ireland has risen by almost 10% since APD was abolished in April, with the VAT received from the additional tourist spend far exceeding the loss of APD. The UK should follow suit and axe the tax for all.”

Alastair McCaig of IG Services said Ryanair: “Parents up and down the country will be keeping their fingers crossed that this is just the first shot in an airlines price battle.”

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