Italy’s competition watchdog is to probe Ryanair over alleged abuse of its market power, widening the ambit of the clash between Prime Minister Giorgia Meloni’s government and the Irish budget carrier.
The investigation is focusing on Ryanair’s efforts to sell non-aviation services on its booking platform, the watchdog said in a statement on Wednesday. The authority has received complaints since May that the Irish airline is taking advantage of its “dominant position” to “extend its market power” by offering travel related services such as hotels and rental cars on its ticket-selling platform, it said.
A preliminary assessment had indicated that Ryanair’s business tactics – which include discouraging consumers from purchasing airline tickets through travel agencies – are “harming travel agencies – both online and offline – as well as clients that buy from such agencies,” the authority added.
Ryanair is embroiled in a long-running row with Europe’s largest online travel agents, including Booking.com and Expedia, and has called on all passengers to book through its own website.
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Commenting on the investigation Ryanair said: “We welcome the Italian Antitrust Authority investigation which will make it clear to passengers that they should book directly on Ryanair.com for the lowest fares and so we can communicate directly with them to ensure they make the necessary security declarations and are informed directly of all safety and regulatory protocols when travelling, as legally required.
“We are, however, surprised that the Italian Antitrust Authority has shown no interest in the fact that prices of Ryanair flights and optional services on online travel agent websites often exceed the original Ryanair.com prices by up to 200 per cent.”
The investigation comes a day after Rome scrapped controversial plans to cap ticket prices on routes from Italy’s mainland to the islands of Sicily and Sardinia, after ticket prices surged more than 70 per cent during this summer’s holiday rush.
Industry minister Adolfo Urso said that Rome was instead giving enhanced powers to the competition authority to monitor pricing trends, and to intervene if they felt that prices had jumped too high.
The proposal to cap prices had provoked an uproar among European airlines. Trade body Airlines 4 Europe sent a formal protest to Brussels, while companies’ executives questioned how the measure – which was supposed to be based on past average prices – would work in practice.
Ryanair called the proposed price caps “illegal” and announced that it was cutting down its winter flight schedule flights to Sardinia in response.
The new antitrust investigation into Ryanair’s selling practices comes at a time as airlines increasingly seek to “upsell” extra products – such as car rentals, hotel rooms and travel insurance – to customers through their booking platforms.
Airline industry executives see potential to significantly boost revenue through such sales, as ever more sophisticated booking systems tailor personalised offers to customers.
A 2019 McKinsey report estimated the industry could raise revenues by 4 per cent by 2030 – or $40bn annually – by embracing “modern retailing” of both in-flight extras such as seat selection, and non-flight products. – Copyright The Financial Times Limited 2023
