Labour treating travel industry ‘as a cash cow’, complains Jet2 boss

Labour ministers are treating airlines and package tour operators like a “cash cow” to fund public spending, the head of Britain’s largest holiday company has claimed. Steve Heapy, boss of Jet2, said the Government had already swamped the sector with taxes and warned Rachel Reeves that further increases will lead to higher airfares, making it harder for cash-strapped Britons to afford their summer holidays.

“I would ask the Government not to continue using the airline and holiday industry as a cash cow and a bottomless pit of money,” Mr Heapy said.

“Any additional taxation on the airline and holiday industry is inevitably passed on to customers and that will put prices up.”

Mr Heapy said that the Chancellor, who is believed to be considering further increases to the air passenger duty (APD) departure tax, risked making it too expensive for the poorest Britons to take a break at all.

“You can’t escape the fundamental laws of economics and it could be that increased prices result in reduced demand. That’s not good, because the people who will be unable to afford a holiday will be the lowest-earning members of society,” he said.

“That would be a perverse outcome, that flying would become something for the rich and privileged.”

He said that for many Jet2 customers, who he said “work 50 or 51 weeks of the year and treasure their holiday”, a week away is the most important annual purchase.

Increases in APD announced in Ms Reeves’s first Budget will come into effect in April and include a £2 increase in the tax for short-haul international flights, the first since 2012.

For longer flights, the rate will go up by £12 to a maximum of £106, while the rate levy on domestic flights – payable in both directions – will climb to £8.

Airports are also bracing for an anticipated 400pc jump in business rates following the adoption of a new method for calculating the property tax and as passenger numbers surge.

Heathrow faces a bill of about £600m, Gatwick £200m and Manchester Airports Group £150m, which they have warned will be passed to airlines and passengers. Lobby group AirportsUK has written to the Chancellor urging her to cap the increase at 40pc.

Jet2, Britain’s largest tour operator and third-biggest airline, said customers were continuing to book later in the year.

The trend reflects concerns about the cost of living, which is driving consumers to delay purchases until the last minute.

More people are also taking up offers that lock in prices for a £60 deposit, Mr Heapy said.

Flight-only fares fell 7pc over the summer as Jet2 was forced to slash prices and spend more on marketing to fill its planes. That helped lift passenger numbers 6pc to 14m in the half year, while pre-tax profit rose by 1pc to £800m.

Jet2, based at Leeds Bradford airport and with its biggest hub in Manchester, is targeting a major expansion in southern England after announcing last week that it would open a base at Gatwick next March.

It said the performance of newly opened bases in Luton and Bournemouth, its first in the south, had been “encouraging”.

Try full access to The Telegraph free today. Unlock their award-winning website and essential news app, plus useful tools and expert guides for your money, health and holidays.