easyJet PLC is set to cut back on domestic flights in response to an increase in air passenger duty, announced in last month’s Budget.
Routes from London to Scotland and Northern Ireland would be worst affected, chief financial officer Kenton Jarvis signalled on Thursday.
Chancellor Rachel Reeves announced the travel tax would increase by £2 per flight from 2026 in the October Budget, taking the standard rate on a trip within the UK to £16.
Jarvis also warned of a £13 million hit on the back of higher employer national insurance following the Budget, The Telegraph reported.
“We were really happy when the government said they were pro-growth and I understand why they want to increase things like the minimum wage,” he said.
“But the air passenger duty is really disappointing. Fundamentally, it’s exactly what they said they didn’t want to do, which is to tax the working person.
Higher rates risked dampening demand, according to Jarvis, leading easyJet to cut flights after rival Ryanair Holdings PLC (LSE:RYA) previously warned of a similar move.
“We’re an island and we’re taxing what gets the economy moving,” Jarvis added, “it’s at loggerheads with being pro-growth. I don’t think it’s a smart move”.