Ryanair reveals tourism impact of APD

Ryanair reveals tourism impact of APD

Ryanair revealed today how Air Passenger Duty tax is having a negative effect on Britain’s tourism industry. Speaking at the airline’s Q1 results presentation, Ryanair Deputy CEO Howard Millar said:  “Tourist tax has had a negative impact on tourism. We think if the UK really wants to get the economy moving the tourism industry is a huge vehicle for this including London as it’s a massive generator of jobs, restaurants, bars, taxis and all these industries [would benefit from] a multiplier effect.” In a table showing passenger numbers from May 2009-2010, Ireland had suffered an 18% decline and the UK had seen a 5.1% dip in airline visitors and Millar said this would continue. He highlighted Spain’s tourism growth policy in comparison. “Spain was going backwards last year but following a unique set of rules to promote growth in the market by giving discounted charges at the airport and you can see the end result. The market has grown and tourism has returned to growth,” said Millar. In Ryanair’s situation this has been showed by the airline’s recent announcement that it will cut capacity at Stansted by 17%. “That is because of the high charges we are suffering and also driven by the high taxes,” explained Millar. Meanwhile, in terms of the airline’s fleet and figures, Millar said the 7% rise in revenue per passenger had been boosted by higher ancillary sales. “There are a few things driving [ancillary sales]. Food and drink sales are going well as is car hire. Our insurance business is going well too,” he revealed. “We have been helped by the fact that our average flight time has increased by 10%, so the longer people are on the plane, the more they are spending.” These longer flight times have come from new operations to Faro, Malaga and the Canary Islands.  Millar also said the airline had been working to provide mobile phone usage on its flights and held a trial service on 50 of its aircraft. However the trial has now been stopped as its provider did not agree that Ryanair should roll-out the service across its fleet. “As more of these mobiles are used [BlackBerry, PDAs] and international rates are coming down, operators are now more interested, deals are getting done, coverage is getting better and we are finding that it will rise in significance,” explained Millar “It is something for the future and we will look to push it again”. Furthermore the airline posted a downfall in profits as it counts the cost of the volcanic ash disruption. Although the airline posted a 1% increase in profit for Q1 compared to 2009’s Q4 to

Gary Marshall
Written by:
Gary Marshall
Posted On:
Posted In: