The Italian Competition Authority (AGCM) has opened an investigation into Ryanair over alleged abuse of its dominant power in the travel industry to extend its power into other markets such as hotels and car rentals.
The AGCM released a statement claiming that its preliminary view found Ryanair’s leveraging of its dominant position could harm travel agencies, particularly by possibly impeding travel agencies from directly acquiring tickets through their own sites.
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The statement explained: “Ryanair’s conduct seeks to restrict travel agencies from selling airline tickets, which is typically the initial step in planning a holiday and a crucial entry point for selling additional services.
“As such, it could have adverse consequences on both travel agencies and end-consumers, leading to a deterioration of conditions, both in terms of quantity and quality and unjustified difficulties in managing reservations.”
AGCM’s statement also spelled out its belief that Ryanair limited traditional travel agencies’ use of the GDS platform to purchase tickets and subjected them to less favourable pricing and a more limited range of available flights.
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The investigation will likely serve to heighten the existing tension between Ryanair and Italian authorities, which have already come to loggerheads over the Italian Government’s newly introduced price cap for domestic flights to the country’s islands, which limits dynamically adjusting tariffs during peak periods of demand.
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By GlobalDataUpon announcing its winter schedule for the country, Ryanair reported a 10% cut in domestic flights to and from Sicily, blaming the price cap, which it claims will result in higher overall fares due to a reduction in capacity.
CEO Eddie Wilson said: “Community law guarantees airlines the freedom to set prices, but this illegitimate decree damages domestic traffic and, unfortunately, has forced Ryanair to cut its Italian network to/from Sicily by 10%, with the unintended consequence of reduced choice and increase fares for Sicilians. Ryanair has amply demonstrated its commitment to the Sicilian market to date.”
