The European Commission has asked Rome for more information on its measure to combat high flight prices between Italy’s islands and the mainland after airlines argued the move breached EU rules.
Giorgia Meloni’s Italian government on Monday approved the measure which targets the use of flight-pricing algorithms by airlines and bans their use for internal flights between the Italian mainland and Sicily and Sardinia, apart from in rare exceptions.
In practice, the measure would forbid airlines from raising the price of flights between the mainland and Sicily or Sardinia by more than 200 percent of the average price of the flight — although it’s not clear what would count as an “average price.” It comes after low-cost carrier airfares to both islands have soared.
Airlines reacted furiously to Rome’s move, with Ryanair CEO Eddie Wilson branding it “illegal.”
“It’s ridiculous, illegal and interferes with the free market, according to European law,” Wilson told Italian newswire ANSA on Wednesday. “It must be canceled.”
A European Commission spokesperson told POLITICO that the Commission has contacted Italian authorities and expects to receive “more detailed information on the precise content of the measure at stake.”
While the spokesperson said the Commission supports measures that improve connectivity at affordable prices, “sustainable competition with free price setting is usually the best guarantor of affordable prices.”
Only in specific cases, for example journeys to remote regions that don’t make airlines enough money to be financially viable — so-called public service obligations — would EU law allow price regulation.
But that’s not exactly the case for these routes; Ryanair puts on more than 500 weekly flights between Italian islands and the mainland during the peak summer season.
Wilson hit out at the idea that the airline sets its prices based on an algorithmic profile of its passengers, saying it’s a “conspiracy theory based on the fantasy of people who don’t have enough work to do.”
In a follow-up interview with Italian newspaper La Repubblica, Wilson compared the measure to “the Soviet Union in 1927.”
He argued that from an economic point of view the measure is “illogical” as it will encourage the company to reduce its routes to Italy and open to new destinations instead. “Even at the Harry Potter school they understood that you need to increase the offer of a product for prices to decrease,” he added.
The government’s measure will now go to MPs in Italy’s Chamber of Deputies, who have two months to submit amendments.
