Italy dilutes plan to cap some air fares

Industry group Airlines for Europe said it was pleased with the modification, arguing that carriers should be free to set prices

Tue, 19 Sep, 2023 - 16:43

Angelo Amante and Keith Weir

Italy's government has dialled down plans to cap airfares for flights to Italian islands after airlines including Ryanair challenged the legality of its initial proposal.

The government will now give Italy's competition authority the job of policing prices for internal Italian flights to destinations such as Sicily and Sardinia.

The change was proposed in an amendment — still subject to approval in parliament — to a government decree announced in August.

Ryanair had said the decree was "illegal and unenforceable" and challenged it at the European Commission.

Industry group Airlines for Europe, whose members include Ryanair and EasyJet, said it was pleased with the modification, arguing that carriers should be free to set prices.

"If confirmed, this move is both welcome and timely," it said in a statement.

"It safeguards the EU's single market which has successfully served European consumers for three decades.

"It underscores the importance of EU rules and why they must be respected by all, including all national governments," it added.

The Italian government had initially said it was seeking to ban airlines from raising fares to Sicily and Sardinia beyond "200% higher" than the average price for flights.

Industry minister Adolfo Urso told reporters there would "no longer be a ceiling" on prices, but added that the main elements contained in the decree had been maintained.

The competition body, which can impose fines on companies, will be able to intervene during periods of peak demand, such as summer or national holidays, and when the ticket price a week before a flight to the islands is more than 200% above average.

However, Italy's national union of consumers said the competition body should be given enhanced powers to regulate fares.