Ryanair (FR, Dublin International) confirmed it had appealed to the courts of the European Union against a “baseless fine” Hungary imposed on it for passing on to consumers the cost of a new tax meant to target excess profits in some sectors of the economy.
The Irish carrier had already threatened to appeal to the courts earlier this month after the Hungarian Consumer Protection Agency (CPA) fined it HUF300 million forints (USD732,000) it for “deceiving consumers through unfair commercial practices” in relation to the tax, which levies EUR10 to EUR25 (USD10-25) per passenger departing Hungary. The airline also dropped eight routes from Budapest in protest at the tax.
The government of Hungary’s nationalist prime minister, Viktor Orban, announced the special tax in May, to skim extra profits it claimed were being earned by banks, energy and telecoms firms, and airlines, among other companies, hoping to make up for additional spending that helped him win a fourth consecutive term in April.
Ryanair “has now appealed the unjustified fine,” it said in a statement on August 24, “and is confident that the EU Courts will validate its decision to pass on this retrospective tax to passengers.” This is because, it surmised, “EU law - which still binds Hungary - allows EU airlines the freedom to set airfares and pass on taxes to consumers without any interference from national governments.”
It added: “The fact that this baseless fine was announced by the Hungarian Justice Minister on her Facebook page, even before Ryanair received any notification from the Hungarian CPA, shows this was a politically motivated fine from an agency which clearly lacks any independence or autonomy from the Hungarian Govt.”
Ryanair CEO Michael O’Leary added in the statement: “Applying an 'excess profits' tax to the loss-making airline sector in Hungary is inexplicable, and only succeeds in making flying to/from Hungary more expensive and less competitive compared to other Central European airports who have lower costs.”
