On Monday, August 10th, Italy has decided to impose price caps on flights to and from its islands, asserting that the move adheres to the EU regulations.
The measure, which seeks to limit the cost of tickets between the mainland and Sardinia and Sicily during peak periods to 200% of the average annual price, was approved by Prime Minister Giorgia Meloni’s government as part of a wider decree law that necessitates parliamentary approval within 60 days.This move follows a period during which airfares for low-cost carriers to both islands have experienced significant increases.
It’s ridiculous, illegal and interferes with the free market, according to European law.
Eddie Wilson, Ryanair’s Chief Executive
Enterprise Minister, Adolfo Urso, asserted that the Italian intervention was in line with European guidelines. “The state must intervene when citizens are subjected to a measure that doesn’t respond to market rules but which is against and does not protect their rights,” Urso stated.
Ryanair’s Chief Executive, Eddie Wilson, vehemently opposed the move. “It’s ridiculous, illegal and interferes with the free market, according to European law”, Wilson condemned. The airline contended that such interference with pricing mechanisms is “unlawful” and could lead to “unintended consequences”, referring to how airlines might be disincentivized from operating during quieter winter months, given that lower prices during those periods would contribute to the calculation of peak prices. This, he asserted, could prompt airlines to reduce its routes do Italy and shift their focus to other markets. “It must be canceled”, added the CEO.
Wilson rejected the notion that the airline’s pricing is determined by algorithmic profiles of passengers, dismissing it as a “conspiracy theory”. In an interview with Italian outlet La Repubblica, Wilson likened the measure to “the Soviet Union in 1927”.
In Brussels, European Commission spokesman Adalbert Jahnz disclosed that the Commission had reached out to Italy for further details regarding the measure. “The Commission supports measures to promote connectivity at an affordable price in line with EU internal market rules,” he highlighted. He underscored that “sustainable competition with free price setting is usually the best guarantor of affordable prices.”
However, Jahnz also clarified that EU law permits public service obligations with price regulations for specific cases, particularly routes that are either inadequately served by market operators, aren’t financially viable for airlines, or those connecting remote regions. Ryanair’s extensive operations between Italian islands and the mainland during the peak summer season somewhat challenge this premise, has Rynair sustains more than 500 weekly flights for such routes.
As Italy’s measure heads to the Chamber of Deputies, lawmakers have a two-month window to propose amendments.
