Government may not stop until Ryanair leaves Hungary – here is why
A Hungarian online media outlet specialising in travel wrote that the Hungarian government was unlikely to stop until the Irish low-cost airline Ryanair would leave Hungary. They suggested that the Orbán administration’s attacks against the foreign airline favoured its Hungarian-owned competitor, Wizz Air. Below, you can read the details concerning the issue which will affect millions of air passengers in the future.
Government trying to push Ryanair out of the market?
As we wrote last weekend, Ireland’s number one low-cost airline, Ryanair, gave a harsh response to the departure tax introduced by the Hungarian government. They announced that because of the “idiotic” new tax, they would close 8 of their Hungary routes and cut the frequency on 7 additional Hungary routes concerning flights to Czechia, Poland, the United Kingdom and several other countries reachable from Budapest.
Meanwhile, last Monday, Hungary’s customer protection authority fined Ryanair HUF 300,000,000 (EUR 765,000) for “misleading customers through its dishonest business practices”.
Okosutas.hu said they received hundreds of comments suggesting that the Hungarian government tried to push the Irish airline out of the country in favour of Hungarian Wizz Air. They examined whether these claims were justifiable.
They wrote that all airlines operating in Hungary had to pay the government’s new departure tax (“excess profit tax”). It affects most ultra-low-cost companies like Wizz Air and Ryanair. However, there is no difference between the tax’s financial harm in this respect.
Communication war between the government and Ryanair
The above-mentioned two companies have been competing in the Hungarian market for a long time. Beforehand, Wizz Air had the bigger market share, but this year Ryanair took over. That is because the Hungarian low-cost company restarted service later than its Irish competitor after the last COVID wave. However, after Wizz Air’s return, Ryanair lost its advantage.
Okosutas.hu wrote that Ryanair would openly critisise government decisions in other countries if the company believed they contradicted their interests. However, the Hungarian government is not used to such resistance. Therefore, the administration launched a counteroffensive and even fined Ryanair.
Meanwhile, other airlines remained silent and chose to pay the extra costs to the government. Only Ryanair objected to it while Wizz Air accepted the situation. The Hungarian low-cost airline’s case is quite unique. It is both founded and owned by Hungarians. Furthermore, its headquarters is in Hungary. They received lots of tasks from the government during the COVID-19 crisis.
Ryanair does not give up their share
The non-EU cities where Wizz Air is allowed to fly to from Budapest are solely determined by Hungarian government bodies. However, okosutas.hu writes that it does not mean that the government treats the Hungarian airline differently. Wizz Air tries to develop a good rapport with every country’s government. Just like any other multinational company would do.
The extra tax takes a toll on both Wizz Air’s and Ryanair’s businesses. This is the reason why they had to cancel and cut frequency on some routes. However, unlike Ryanair, the Hungarian airline does not communicate those decisions vehemently.
Ryanair and Wizz Air have 24 common routes. Interestingly, none of the 8 routes Ryanair recently cancelled belonged to this category. That means they are not willing to give up even on their tiniest market share.
Source: okosutas.hu, DNH