Hungarian Wizz Air to increase prices because of extra taxes?!
Hungarian Wizz Air may raise its prices because of the government’s plans regarding the so-called windfall taxes. The extra tax will concern eight areas, and the administration would like to collect an annual 800 billion forints with its help.
Wizz Air to introduce higher ticket prices?
The chairman of the Hungarian low-cost airline told hvg.hu that the sector suffered significant losses during the coronavirus epidemic. Furthermore, its income and profit will not reach the pre-pandemic level for a long time. As a result,
nobody can talk about an “extra profit” in the case of airlines.
The fifth Orbán administration plans to introduce a surtax on all airlines operating in Hungary, with a €10-15 fee per passenger. However,
that would mean higher ticket prices
in a sector struggling with a deficit for two years. “Challenging that fact goes against the most basic economic analyses,” Robert Carey, the chairman of Wizz Air, told the Hungarian media outlet.
HVG asked the Hungarian airline after the announcement of the new windfall taxes on Thursday. In the case of the air travel sector, the direct contributors would be companies doing ground handling. Of course, they could pass that on to the airlines concerned. However, it seems, in the end, passengers will pay the extra tax.
Government’s extra tax concerns these eight sectors
In Hungary, Wizz Air handles the largest air traffic. Therefore, the new tax will concern them the most. The company’s chairman said that every extra burden the sector needs to cope with hinders its recovery. The problems of Wizz Air affect the Hungarian economy, he added.
Wizz Air reported a loss of EUR 721 million between April 1, 2020, and March 31, 2021. A year before, its profit was EUR 286 million. In the last financial quarter, the company’s loss was EUR 267.5 million.
As we reported before, the government aims to raise an annual 300 billion forints from the banking sector, including 50 billion by expanding transactions duties, Márton Nagy, the minister for economic development, said on Thursday. A total of 50 billion forints will be collected from insurers and 300 billion from energy sector companies, with a large chunk to be collected from Hungarian oil and gas company MOL, the minister said. The government will collect 60 billion forints from retailers, 40 billion from telcos,
30 billion from airlines,
and 20 billion forints from pharmaceutical companies, not including small pharmacies, he added.
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Source: hvg.hu, DNH