Ryanair to fight ‘absurd’ €256m Italian fine over direct distribution policy

Ryanair is to appeal against a €256 million fine imposed by Italy’s competition watchdog over its direct-sell policy.

 

The ruling was described by Europe’s largest budget airline as “a product of a biased and unsound analysis of Ryanair’s pro-consumer pricing in every market in Italy in which Ryanair operates”.

 

The carrier has instructed lawyers to immediately appeal the ruling  which it said seeks to ignore and overturn a Milan court which declared in January 2024 that Ryanair’s direct distribution model “undoubtedly benefits consumers” and leads to “competitive fares”.

 

Ryanair claimed the Italian Competition Authority (AGCM) issued the ruling and fine “under pressure” from Spanish online travel agent eDreams Odigeo and a “tiny number” of bricks and mortar travel agencies in Italy.

 

However, eDreams Odigeo welcomed the ruling against Ryanair for a "very serious" abuse of dominant market position.

 

The OTA urged the European Commission, national authorities and financial market regulators to also investigate.

 

The ruling details a calculated, multi-stage "exclusionary strategy" to dismantle competition from the independent travel agency sector, eDreams asserted.

 

The company claimed that the ruling “fully vindicates” its long-standing position that Ryanair “leveraged its dominance to orchestrate a sophisticated strategy to coerce competitors through illegal means”.

 

General counsel Guillaume Teissonnière claimed that the antitrust ruling exposes “systemic illegality at the heart of Ryanair”.

 

He added: “This corporate culture of complete disregard for the law must end. We therefore call on authorities across Europe to follow the AGCM’s lead and intervene immediately. 

 

“It is time to enforce compliance, restore market confidence and dismantle all illegal obstacles, ensuring that no company is allowed to operate above the law.”

The ruling came despite the AGCM appearing to accept that Ryanair’s current approved OTA and travel agent direct agreements, which allow all OTAs and bricks and mortar travel agents “cost free” unfettered access to its fares - with the exception of promotional rates - as long as they agree not to overcharge consumers when selling fares and ancillary services, according to the carrier.

 

Ryanair group chief executive Michael O’Leary said: “If today’s legally unsound AGCM ruling and fine is not appealed, then the AGCM proposes to set itself above the Milan Courts in making competition decisions. 

 

“Ryanair has fought for many years for transparent pricing, and our approved OTA agreements, which have been agreed by almost every large OTA, with the notable exception of one Spanish OTA, who continues to overcharge its customers for flights and ancillary services, are manifestly and clearly pro-consumer.

 

“When Ryanair first started in 1985, 20% of ticket revenues were wasted paying travel agents 10% commissions, and GDS systems 10% commissions, in an industry with high fares but profit margins of less than 1%. 

 

"The internet and the ryanair.com website have enabled Ryanair to distribute directly to consumers, and Ryanair has passed on these 20% cost savings in the form of the lowest air fares in Italy and Europe. 

 

“Today’s AGCM ruling is both legally unsound, and it contradicts the precedent Milan court ruling of January 2024, which declared that Ryanair’s direct distribution model ‘undoubtedly benefits consumers’.”

 

He added: “Ryanair looks forward to successfully overturning this legally flawed ruling and its absurd €256 million fine in the courts. 

 

“Today’s ruling shows that the AGCM cannot be trusted to protect consumers, or uphold competition law, when it can be so easily misled by a tiny number of self-serving bricks and mortar travel agents and a Spanish OTA, making false claims. 

 

“It is these OTAs and travel agents that the AGCM should be protecting consumers from. 

 

“Both we and our lawyers, are confident that this flawed AGCM ruling and its absurd €256 million fine will be overturned on appeal.”