EasyJet threatens to cut flights after budget announcement (Image: Getty)
EasyJet is cutting its domestic flight schedule in a move that will mainly impact services between London, Scotland and Northern Ireland, the incoming CEO has confirmed.
It comes after Rachel Reeves hiked the rate of air passenger duty (APD) paid by airlines in her autumn budget, meaning an economy ticket for a short-haul flight will cost up to ￡2 more from 2026.
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Kenton Jarvis, current finance chief and soon-to-be chief executive of the company, is also preparing for a ￡13 million impact from Ms Reeves' national insurance hike, but the APD rise will be even more damaging, he told The Telegraph.
"We were really happy when the government said they were pro-growth and I understand why they want to increase things like the national wage," Mr Jarvis said. "But the APD is really disappointing.
"Fundamentally, it's exactly what they said they didn't want to do, which is to tax the working person."
READ MORE Rachel Reeves savaged for ‘mindblowing’ economic incompetence [REPORT]
The cuts will mainly impact journeys between London, Scotland and Northern Ireland (Image: Getty)
He said flights would be reduced between London and the other UK capitals in response to a "dampened demand" sparked by the tax change.
Ryanair also confirmed earlier this month that it was axing UK-based flights by 10%, the equivalent of five million passengers, following the budget decision.
Airline chief Michael O'Leary slammed the move as "idiotic" and said the chancellor had "no clue how to deliver growth in the UK economy".
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The policy also means that private jet users will see a 50% hike in APD.
In her budget speech, Rachel Reeves said: "Air passenger duty has not kept up with inflation in recent years so we are introducing an adjustment."
The duty was brought in by then-chancellor Kenneth Clarke in 1994 to ensure airlines were paying their fair share of tax.