Passing on the cost of tax on extra-profits to ordinary consumert is a no go, says Justice Minister.Continue reading
The low-cost airline Ryanair is to cancel eight of its Budapest routes after a dispute regarding the recently-introduced extra profit tax in Hungary. The company has already indicated that the extra costs could easily result in flight cancellations or groundings.
Reportedly, the following destinations are planned to be removed from the schedule: Bordeaux, Bournemouth, Cologne, Kaunas, Krakow, Lappeenranta, Riga, and Turin. Tickets were on sale to these destinations shortly before the announcement. Air services to these cities will be suspended from the winter timetable changeover.
According to the Hungarian travel portal Okosutas.hu, the flight cancellations could be a reaction to the extra profit tax by Ryanair.
The company has long been opposed to the windfall tax, which requires a contribution from the airlines.
It is supposed to be collected by airport ground-handling companies and charged to passengers departing from domestic airports. There are two tariffs for the airline tax: if the passenger’s final destination is the European Union, Great Britain, Northern Ireland, Albania, Andorra, Bosnia and Herzegovina, Northern Macedonia, Iceland, Kosovo, Liechtenstein, Moldova, Monaco, Montenegro, Norway, San Marino, Switzerland, Serbia, or Ukraine, the tax is HUF 3900 (EUR 10) per passenger. For persons flying to other countries, the contribution is HUF 9750 (EUR 25).
The decision has led Ryanair into a row with the Hungarian government after the airline decided to include the 3,900 forints in the price for bookings made before the tax was announced but for a later date. If customers did not want to pay this, they had to cancel their flights.
In response to this, at the initiative of the Minister for Economic Development, Márton Nagy, the Government Office of Budapest launched a consumer protection investigation against Ryanair in Hungary. The results of the investigation have already been published, with
a HUF 300 million (EUR 760,000) consumer protection fine imposed on the airline for passing on the extra profit tax to the passengers.
Ryanair claims that the fine is unfounded and is taking the case to court.
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