Minister for economic development, Márton Nagy, quickly announced that his ministry is launching an investigation into the 'unfair ticket pricing.'Continue reading
The news comes as disappointment for those who scare-mongered about Ryanair closing its services in Budapest: Michael O’Leary, CEO of the airline, announced that they will keep on operating in the country, although the number of flights will be reduced.
Earlier media reports suggested that the reason for Ryanair’s CEO coming to Hungary was to announce the closing of the airline’s services in the country. This was based on the recent news regarding Brussels and Athens, where Ryanair indeed closed down its services due to recently introduced additional taxes.
However, this was not the case for Hungary, where O’Leary held a press conference on Tuesday. The CEO explained that Ryanair will still operate from Hungary, although they will reduce the number of flights originating from the country, reported Index, a Hungarian news site. However, the O’Leary could not say exactly which seven routes would be affected by the cuts, and advised journalists to check with their press office, reported Telex, another Hungarian news portal.
It was already announced in August that the airline would shut down eight Budapest-bound routes this winter. However, there will be further changes as the company will reduce the number of flights on seven additional routes to the Hungarian capital.
This will reduce the number of Ryanair flights in Hungary from 53 to 45. The CEO also said that Ryanair had previously carried 4.5 million passengers a year, which is now expected to fall below 4 million with the cancellation of the routes.
Michael O’Leary added that Ryanair made a loss of 2.5 billion pounds over the last two years. He now believes that Hungary will become less attractive to tourists as air fare is more expensive, so travellers are likely to choose to visit neighboring countries instead.
In a statement issued before the press conference, Mr O’Leary repeatedly described the windfall taxes as nonsense and regretted that he was unable to announce new routes. The Hungarian government announced earlier the introduction of windfall taxes which affect airlines and which Ryanair wanted to pass on to passengers with increased costs. However, the Hungarian government considered this move unacceptable.
This led Ryanair into a public dispute with the government, and the two sides exchanged messages several times over the summer.
At one point, Michael O’Leary called Márton Nagy, the Minister for Economic Development, stupid for criticizing Ryanair’s activities.
The latest development was when Justice Minister Judit Varga announced that a HUF 300 million (EUR 755,000) consumer protection fine would be imposed on the airline. Ryanair has appealed against this, but the outcome is not yet known. In this context, O’Leary said they were prepared for the Hungarian authority to reject their appeal, but were ready to take the case to the European Court of Justice.
As it turned out at the press conference on Tuesday, Michael O’Leary’s view on the tax has not changed, admitting that the company’s strategy was to pass the extra profit tax on to passengers.
According to him, they do not understand why the extra profit tax had to be imposed on airlines since they have been loss-making for the last two years because of the pandemic and the war between Russia and Ukraine. O’Leary said that they drew the Hungarian government’s attention to the fact that European Union rules allow them to change the price of tickets, and so they did. Moreover, he believes Hungary is the only country in the European Union to impose a surcharge on airlines that are already making losses.
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