Ryanair Criticizes Italy’s Domestic Price Cap, Drawing Comparison to Soviet Union Measures
Ryanair Group’s Chief Executive Officer (CEO) Eddie Wilson has expressed criticism for the newly introduced ticket price caps on domestic flights in Italy, comparing them to methods the Soviets used in the 1920s.
“It’s ridiculous, illegal, and interferes with the free market, according to European law,” Wilson said in an interview with the Italian news agency Agenzia Nazionale Stampa Associata (ANSA). The executive argued that if the measure is not canceled, it would impact the low-cost carrier’s ability to operate in the country.
In a separate interview with Italy’s La Republica, Wilson said that “even Harry Potter knows” that “to reduce prices, you need to increase the number of seats”. Ryanair’s CEO added that the measure compares to “the Soviet Union in 1927”, and that the low-cost carrier will appeal the measure in front of the European Commission (EC), deeming it to be “illegitimate”.
On August 7, 2023, the Council of Ministers of Italy adopted the measure to cap ticket prices on domestic flights to Italy’s islands. Part of the Urgent provisions to protect users and regarding economic activities and strategic investments decree/law, the bill aimed to fight “expensive flights”
The cap bans airlines from using dynamic pricing on flights during the peak period of demand linked to seasonality or during a national emergency, which would lead to the price of a ticket rising by 200% compared to the average fare. In addition, the law prohibits airlines from using “automated ticket pricing procedures” on domestic flights from/to Italy’s islands based on the passenger’s device and/or previous browsing activities.
“The companies must always inform the user, for online ticket purchases, about the use of profiling tools,” the law’s text continued.
During its Q1 FY24 presentation, the airline outlined that it has the largest market share in Italy with 38%, with ITA Airways and easyJet its biggest competitors in the country. Compared to the summer 2019 season, the airline has gained an additional 12% market share in Italy, noted Ryanair.
Currently, Ryanair operates domestic flights between mainland Italy and its islands from two airports in Sardinia, Alghero Fertilia Airport (AHO) and Cagliari Emas Airport (CAG), and three from Sicily, namely Trapani Birgi Airport (TPS), Catania Fontanarossa Airport (CTA) and Palermo Falcone-Borsellino Airport (PMO), according to flightradar24.com data.