• 

  Ryanair

  IATA/ICAO Code:

  FR/RYR

  Airline Type:

  Low-Cost Carrier

  Hub(s):

  Dublin Airport, London Stansted Airport, Milan Bergamo Airport

  Year Founded:

  1985

  Airline Group:

  Ryanair Group

  CEO:

  Eddie Wilson

  Country:

  Ireland

Ryanair has followed up on its refusal to pay Hungary's $725,000 "baseless" fine by launching an appeal. The Irish carrier was handed the hefty penalty earlier this month following a consumer protection investigation by Hungarian authorities.

Ryanair appeals Hungarian fine

Budget airline Ryanair announced today that it has launched an appeal with European Union (EU) courts after Hungary imposed a 300 million forints ($725,000) fine due to alleged consumer protection violations. The issue relates to Ryanair passing on a new "extra profits" tax to consumers by raising fare prices, a practice Hungarian authorities have deemed unlawful.

Ryanair Group CEO Michael O'Leary said,

"The only thing more idiotic than the Hungarian government’s decision to impose an “excess profits” tax on the loss-making airline industry is the Hungarian Consumer Protection Agency’s decision to impose this completely baseless fine, and then notify its Justice Minister before notifying Ryanair. We have now appealed this baseless fine which we will ultimately overturn before EU Courts as EU law guarantees airlines’ freedom to set prices and pass on retrospective taxes to consumers."

Along with launching an appeal, Ryanair has made cuts to its Budapest routes in protest against the fine. The carrier has canceled seven routes entirely - Bordeaux (BOD), Bournemouth (BOU), Cologne (CGN), Kaunas (KUN), Kraków (KRK), Lappeenranta (LPP), Riga (RIX) and Turin (TRN) - while reducing frequency on a further seven routes - Amman (AMM), Bristol (BRS), Pisa (PSA), Prague (PRG), Sofia (SOF), Tel-Aviv (TLV) and Warsaw (WAW).

The airline intends to bolster its services to other neighboring countries, such as Slovakia, Austria, Croatia, and Romania, which, in the words of O'Leary, "do not have any idiotic “excess profits” tax on loss-making airlines."

What exactly is the problem?

In May, Prime Minister Viktor Orban's administration announced a new tax on supposed extra profits affecting various businesses and organizations, including airlines. For carriers, the tax works out at around 10 to 25 Euros ($10 to $25) per passenger and came into force in July. In response, Ryanair passed on a portion of the retrospective tax to passengers, which it claims is well within the boundaries of European Union law.

O'Leary added,

"The Hungarian government and its Consumer Agency is bound by these EU laws. Applying an “excess profits” tax to the loss-making airline sector in Hungary is inexplicable, and only succeeds in making flying to/from Hungary more expensive and less competitive compared to other Central European airports that have lower costs and no idiotic “excess profits” taxes. This stupid tax has already caused Hungary to lose routes and flights this Autumn to lower-cost neighboring EU countries."

The airline also alleges that the fine is politically motivated, citing that the Hungarian Justice Minister announced it on her Facebook page before Ryanair had even been informed.

Discover more aviation news with Simple Flying.

Wizz Air under investigation

As Simple Flying reported this week, Hungary is investigating Wizz Air for reported consumer protection breaches after receiving a flurry of complaints about the low-cost airline. This investigation will focus on Wizz Air's failure to adequately meet consumer needs in the wake of flight delays and cancelations.

Additionally, the carrier is accused of charging an unlawful surcharge on customer service helpline calls and failing to compensate overcharged passengers. It would seem the scope of the investigation against Wizz Air is much broader than Ryanair's, which primarily focused on the Irish carrier passing on tax charges to passengers.

What are your thoughts on this dispute between Ryanair and Hungarian authorities? Let us know in the comments.