Ryanair cuts routes from Hungary due to new airline tax

Record ID: 1688639

  • Title: Ryanair cuts routes from Hungary due to new airline tax
  • Date: 13th September 2022
  • Summary: BUDAPEST, HUNGARY (SEPTEMBER 13, 2022) (REUTERS) RYANAIR'S CHIEF EXECUTIVE MICHAEL O'LEARY POSING FOR PHOTOS, HOLDING PLACARD WITH SIGN READING (English) “Scrap 'excess profits' tax on loss making airlines” MEDIA WORKING O’LEARY HOLDING BANNER AND MAKING FACES MEDIA WORKING (SOUNDBITE) (English) RYANAIR CHIEF EXECUTIVE, MICHAEL O'LEARY, SAYING: “We are closing eight routes at Budapest this winter, we are also going to reduce frequencies, weekly frequencies on another seven routes of the 45 routes that we operated this summer.” MEDIA WORKING (SOUNDBITE) (English) RYANAIR CHIEF EXECUTIVE, MICHAEL O'LEARY, SAYING: “I am sorry to say we have less routes, we will have fewer routes, fewer passengers and we will see traffic decline this winter in Hungary. We would wish to keep investing in Hungary, we want to keep growing our business in Hungary, but we can’t do so when Hungary insists on levying an access profit tax on an industry that has made record losses over the last two years. And the loss in this case will be Hungary’s. Ryanair has the capacity to move the aircrafts and move the routes to other, lower cost neighbouring countries who are not levying an access profits tax on the airline sector. And sadly, it means that Hungarian families, Hungarian citizens and visitors will now be paying higher fares this winter to travel to and from Hungary.” BUDAPEST, HUNGARY (AUGUST 18, 2022) (REUTERS) RYANAIR PLANE LANDING AT BUDAPEST AIRPORT VARIOUS OF RYANAIR PLANE TAXIING RYANAIR SIGN ON AIRCRAFT BUDAPEST, HUNGARY (SEPTEMBER 13, 2022) (REUTERS) (SOUNDBITE) (English) RYANAIR CHIEF EXECUTIVE, MICHAEL O'LEARY, SAYING: “As for the consumer protection fine, we will appeal that to the Hungarian courts, we confidently expect that we will lose in the Hungarian courts, but we will then appeal it in the European courts where we will rely on European law. And I quote you EU regulation 1008/2008, Article 22 which guarantees community airlines the freedom to set airfares for community air services. So, under European law the Hungarian government, while it is entirely free to levy an access profits tax on a section that is losing money, it does not have either the power or the freedom to tell those airlines ‘you are not allowed to pass these taxes on to your costumers.” BUDAPEST, HUNGARY (AUGUST 18, 2022) (REUTERS) COCKPIT OF RYANAIR PLANE VARIOUS OF PASSENGERS GETTING OFF PLANE BUDAPEST, HUNGARY (SEPTEMBER 13, 2022) (REUTERS) (SOUNDBITE) (English) RYANAIR CHIEF EXECUTIVE, MICHAEL O'LEARY, SAYING: ”The future of Hungarian tourism and industry lies entirely on making Hungary an attractive destination and a low-cost competitive destination here in central Europe. The Hungarian government has badly damaged Hungarian air travel, the air transport sector and Hungarian tourism with this idiotic and stupid tax. And we would like the justice minister or any other minister to explain how you could levy and access profits tax on an industry that is making record losses.” BUDAPEST, HUNGARY (AUGUST 18, 2022) (REUTERS) PASSENGERS IN DEPARTURE HALL
  • Embargoed: 27th September 2022 15:34
  • Keywords: Michael O'Leary Ryanair Airlines Ryanair in Hungary cancelled routes travel tax
  • Location: BUDAPEST, HUNGARY
  • City: BUDAPEST, HUNGARY
  • Country: Hungary
  • Topics: Company News Markets,Europe,Economic Events
  • Reuters ID: LVA001502513092022RP1
  • Aspect Ratio: 16:9
  • Story Text: Budget airline Ryanair announced on Tuesday (September 13) that it will cancel eight routes out of Budapest over windfall taxes imposed on airlines by the Hungarian government.
    Ahead of the meeting with media in Budapest Ryanair's chief executive Michael O'Leary posed for pictures holding a placard reading: "Scrap 'excess profits' tax on loss-making airlines"
    Speaking to journalists O'Leary said Ryanair would like to grow business in Hungary, but it "can’t do so when Hungary insists on levying an access profit tax on an industry that has made record losses over the last two years," he said.
    Nationalist Prime Minister Viktor Orban's government in May announced the special tax targeting "extra profits" earned by major banks, energy companies and other firms, aiming to plug budget holes created by a spending spree that helped him gain re-election in April.
    The new levy on the airline industry involves a tax worth 10 to 25 euros per passenger departing Hungary from July.
    Ryanair has previously called on Orban's government to scrap the new tax, saying the measure would damage Hungarian tourism and the economy.
    On Wednesday O'Leary called the tax “idiotic and stupid”, adding that applying "an excess profits tax" on what he called a loss-making industry was inexplicable and only succeeded in making flying to and from Hungary more expensive and less competitive compared to other Central European airports.
    Ryanair said earlier this month that it would appeal against a 300 million forints ($726,000) fine following a consumer protection investigation.
    O'Leary said that under European law, the Hungarian government did not have the power to tell airlines not to pass tax on customers.
    (Production: Krisztina Fenyo, Malgorzata Wojtunik)
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