Ryanair chief executive Michael O’Leary is gearing up to fight Gordon Brown over air passenger duty after refusing to pay the Treasury £2m of back-dated taxes.
O’Leary has labelled Mr Brown “scrooge” over his plans to apply an increase in air tax duty to customers that booked flights before the announcement was made. O’Leary adds that he will charge customers from February 1 but he refuses to charge 455,000 passengers for pre-booked flights.
The total bill Ryanair will be liable for when the legislation passes is £2,275,000.
The Chancellor of the Exchequer announced last month that air passenger duty would increase from £5 to £10 per passenger from February. But the tax, which the Chancellor claims will benefit the environment, will be applied to any passenger with a current booking made before the announcement was made.
O’Leary says: “These extra taxes on ordinary people, which will generate over £1bn per year, will go straight into Scrooge’s deep pockets and will have no effect on the environment whatsoever. Scrooge Brown is taxing the poor and in many cases, doubling the cost of low fare air travel.”
Flybe, the regional low cost airline, also faces a bill for millions of pounds for pre-booked flights. It is currently lobbying the treasury to help it find the money. But EasyJet has decided to pass on the cost to consumers. It sent an e-mail on Tuesday to 60,000 customers who have paid for their flights, to ask them for an extra £5 each.
An EasyJet spokesman says: “Our terms and conditions allow us to contact passengers in such a situation.” He adds that EasyJet is examining all its options if customers refuse, including barring them from boarding their flights.
A Treasury spokesman says: “Taxes are not optional. We will pass the legislation to allow us to collect this money in the budget debate in March.”