Kenton Jarvis, chief executive of easyJet, told the Airlines for Europe conference in Brussels that easyJet increased capacity and added connectivity when the London government froze Air Passenger Duty for a couple of years. The investment made in those lower-tax years delivered results for the airline.
However, the duty has been restored and Westminster says it will increase in line with the retail prices index. This change will affect connectivity in the. Jarvis stated that the impact will start to appear as costs rise.
He cited Amsterdam Schiphol as an example where airport fees and taxes reach very high levels. Although easyJet maintains nine aircraft at the airport at present the group flies longer distances to offset costs.
He felt that longer routes result in reduced connectivity and fewer frequencies on certain flights. The airline keeps operations at Schiphol for now but faces constraints from the fee structure. Jarvis indicated that these conditions limit growth and route options.
“During the years that domesticated PD came down, we grew up capacity and we put more connectivity in, and that investment came through those lower years.”
“Now we’re just starting to have it put back and it’s going to increase by RPI, and I think that will start having an impact, and that will start infecting connectivity.”
“Although we’re maintaining our nine aircraft there at the moment, we’re flying further distances, which means we’re having less connectivity and flying fewer frequencies on some other flights.”
