Italy’s proposed cap on air fares is in line with European Union norms and is not a breach of free-market rules Italy’s transport ministry said Wednesday. Some airlines have asked the European Commission to intervene in the matter.
Italy’s Transport Ministry decided to disable the algorithm which it says sets unfair prices for flights into and around Italy. This action has seen the likes of Ryanair’s CEO Eddie Wilson blast the measure.
Airlines have asked the European Commission to intervene in relation to plans by the Italian government to cap air fares on certain domestic routes. This according to an article published by the Financial Times on Tuesday.
“The measures introduced by the Ministry of Enterprise and Made in Italy are fully in line with European directives on the protection of consumers in the face of speculative phenomena, or in any case distortions of the market, such as those reported in recent months by the controlling authorities for some air routes”, said ministry sources.
They added that “the ministry has all the elements needed to respond, in a complete manner, to any requests from the European Commission as is customary through its own offices”.
In a letter seen by the FT newspaper, the trade body Airlines for Europe (A4E) called on Brussels “to clarify with Italy that this intervention impacts the free and deregulated air transport market in Europe”.
Last week, the government approved the Omnibus decree setting a ceiling on the prices of flights to Sicily and Sardinia. However, A4E argues that this could “set a precedent and lead to a domino effect”.
Limiting fares would “violate” the rights of companies to “compete wherever possible, set prices and define services as they see fit”, the trade body added.