Will Ryanair reduce Budapest flights due to the departure tax?!

The director of Europe’s largest low-cost airline says the Hungarian government’s argument that the departure tax of the loss-making aviation industry actually aims to protect Hungarian families is outrageous.

In its official statement, Ryanair said that the new tax is not a departure tax, but a highway robbery by a government that is completely out of touch with reality – reported by Szeretlek Magyarország.

Last year, Ryanair reported a loss of €355 million. Meanwhile, Wizz Air, the second-largest airline in Hungary after Ryanair, reported a loss of almost €650 million.

With a combined loss of €1 billion for the two airlines, Ryanair’s CEO Michael O’Leary does not feel that the imposed departure tax is justified.

The head of the Irish low-cost airline did not hide his opinion in his statement. As he said, Márton Nagy’s argument about the departure tax was complete idiocy. As he understands the Minister is proposing a tax of €10 per flight when airlines are making record losses. According to the CEO, despite his economics degree, the Minister should be sent back to school.

The CEO revealed that Hungary is the only country to impose a departure tax on airlines despite record losses. In contrast, other governments are able to find sectors where windfall profits are now being made – for example, the British government has imposed taxes on oil and gas companies, Shell and BP – „how anyone can think of finding those profits here” – commented the CEO to the Hungarian news portal hvg. He cannot think of a reason that would justify the government’s decision. According to Michael O’Leary, the newly introduced measure cannot be about “protecting Hungarian families”, since many Hungarian families have relatives living abroad. Thus, visiting them becomes even more financially burdensome.

According to the CEO, the Irish low-cost airline is considering reducing the number of its Budapest flights. Michael O’Leary said „Ryanair is present in 26 EU countries where it had not occurred to the governments to impose a departure tax on air passengers. People can travel elsewhere instead of Hungary – that’s why I think this tax will be detrimental not only to air travel but also to tourism and employment.”

While the choice of destinations is not expected to change, the frequency of flights is likely to do so.

Some will see a reduction in weekly frequencies, others in the number of daily flights. For those who bought tickets for July or later, Ryanair has already sent a letter saying that if they were to travel, they would have to pay the €10, as the airline has no extra profit to pay. From July this amount will be included in the fares. The Hungarian government has launched a consumer protection investigation into the matter, which is still under review. According to the CEO, Hungary is a member of the European Union and airlines in the European Union have the right to set their own pricing policies. European governments have no say in what prices are set. The only people who can complain about this are Ryanair’s passengers.

The airline’s chairman expects pre-pandemic, or beyond, traffic for the next financial year. Numerically, passenger numbers could rise to 150 million in the next financial year. But profit is not expected because of the sharp rise in oil prices due to the war: from $60 a barrel to $120 a barrel.

The period ahead shows a lot of uncertainty for several reasons. If the war was to cross the border of Ukraine, it would obviously lead to a collapse in air traffic, and if the Ukrainians can beat back the Russian invasion, it could lead to a further decrease in traffic. In addition, it is questionable how the coronavirus situation will develop, and whether new variants are expected in the autumn-winter period.

Read alsoMinister: Ryanair’s remarks on Hungarian windfall taxes unacceptable

Source: hvg.hu, szeretlekmagyarorszag.hu