Mamma mia! Airlines object to Italy’s flight price cap
European airlines have called on the European Commission to intervene in a feud with Italian prime minister Georgia Meloni, over proposals to cap air fares on certain routes.
Last week, Meloni’s populist government announced plans to cap the price of tickets between the mainland and Sardinia and Sicily during peak periods, at 200 per cent of the average annual price.
In a letter seen by the Financial Times, trade body Airlines for Europe (A4E) said that Brussels must “clarify with Italy that this intervention impacts the free and deregulated air transport market in Europe.”
A4E’s managing director Ourania Georgoutsakou said airlines were “strongly concerned” that should the law be adopted, “it could set a precedent and lead to a domino effect resulting in similar regulations being adopted in other EU member states.”
The changes, he argued, would “violate” the right of airlines “to compete wherever possible, set prices and define services as they see fit.”
Major European carriers have strongly objecting to the proposals, with A4E representing the likes of Easyjet and Ryanair.
Ryanair’s CEO Eddie Wilson slammed the decision to “unlawfully interfere on how airlines set prices for airfares,” arguing it would “reduce capacity, halt route development, take winter connectivity away and will raise prices for all passengers flying from the Islands to the Italian mainland.”
The Dublin-based carrier claims the plans are “illegal” under current European Union law and could cause future air fare hikes as a result of a reduction in the number of flights.
Wizz Air, who are not a member of A4E, confirmed to City PM that they had also raised concerns with the European Commission yesterday.
“Our strong view is that the proposed plan is contrary to the principle of pricing freedom, which is entrenched in EU law,” a spokesperson said.
“Ultimately, we don’t believe that the decree will achieve what the Italian government intends – which is the reduction of high fares.”
The carrier added that its prices were affordable “and will continue to be, and we don’t believe in the interference of the well-established commercial freedom to price our airfares.”
Amid booming post-pandemic demand this year, the sector has faced criticism over rising ticket prices.
Industry body IATA said in June that it expects fares to keep rising for the next 10-15 years, with the cost of decarbonisation further adding to carriers’ cost base.
The European Commission were contacted for comment.