UK Budget Draws Agent Backlash; Ryanair Plans 20% Fare Rise

A 3.9% minimum wage increase from next April heads a UK Budget package that travel agency leaders say will raise employment costs, stall branch expansion and accelerate high street closures — while Ryanair chief executive Michael O'Leary told investors the carrier needs a 20% fare increase this winter.

Ryanair reported a 15% fall in post-tax profit to €2.15 billion for the six months to September, and O'Leary warned jet fuel prices would stay high "well into 2027". He forecast capacity "flat or down" year on year, with "more of our competitors taking out capacity day by day" — a supply signal that points to sustained airfare inflation across the UK outbound market.

What does the Budget change for agents?

The government confirmed the wage rise and lifted the valuation threshold for business rates on high street premises. Agency leaders said the combination does nothing for growth.

Premier Travel, which employs 150 staff, flagged immediate cost pressure. Managing director Paul Waters said the rise would "inevitably add to employment costs", even though all Premier staff already earn above the minimum.

"It creates additional cost pressures as we try to maintain differentials between roles, levels of experience and responsibilities," Waters said. He called wage inflation "a significant consideration" when weighing whether to open new branches, and pointed to the cumulative burden of rising employment, property, energy and operating costs.

His verdict on policy direction was blunt: "If the government wants thriving town centres and economic growth, it's important to encourage businesses to invest and expand rather than disadvantaging growth."

Advantage Travel Partnership chief executive Julia Lo Bue-Said echoed the point. "Businesses need the right conditions to absorb these increases while continuing to invest," she said.

Will agencies cut jobs or branches?

Triangle Travel managing director Rob Kenton expressed "significant disappointment" and predicted closures among high street retailers operating on "razor-thin margins". He argued the Budget missed the one reform bricks-and-mortar businesses needed.

"An overhaul of the outdated business rates system — a reform bricks-and-mortar businesses desperately need — failed to materialise. Without reform, the pressure on high streets will only intensify," Kenton said. "Small and medium-sized enterprises can't invest in hiring or expansion when disproportionate overhead costs undercut their viability. The knock-on effects will be store closures and a negative impact on local employment."

Katharina Peck, commercial director of The Travel Network Group, predicted "greater scrutiny around recruitment and investment decisions". Hiring will continue, she suggested, but with "an increased focus on roles that support growth and productivity" — a shift that constrains headcount in back-office and administrative functions first.

Do all trade segments lose?

Not equally. Aito executive director Martin Sumners said the small business rates threshold change would help the consortium's high street agents but leave its tour operators "behind". Operators, he said, face "navigating narrow margins while absorbing risks beyond their control" as the wage rise bites.

Training and recruitment firms took a different view of the wage floor. Michelle Van Sprang, managing director of AS Training, argued the rise matters for people entering the industry: "It's important we recognise the value young people bring to businesses. Apprenticeships aren't simply about filling vacancies at a lower cost. They're about developing people, building careers and creating a sustainable workforce."

C&M Travel Recruitment said it expected no immediate impact from the Budget measures on hiring demand.

What is the net outlook for sellers of travel?

The Budget raises agency input costs on wages and property without delivering rates reform, pushing independents toward tighter recruitment and slower branch expansion. On the demand side, Ryanair's 20% fare target and flat capacity suggest higher package and flight costs for consumers into 2027 — a combination that will test agency margins well before any policy relief arrives.