Ryanair (FR, Dublin International) plans to lodge an appeal with the courts of the European Union after Hungary fined it HUF300 million forints (USD771,000) it for “deceiving consumers through unfair commercial practices” in relation to a new profit tax.
As previously reported, Ryanair demanded in June that the nationalist government of Viktor Orbán scrap what it called a “misguided” tax placed on airlines of EUR10 to EUR25 (USD10.25-26.60) per passenger departing Hungary starting from July. The special tax measure, estimated to be worth HUF800 billion (USD2.06 billion) in total, targets “extra profits” earned by “banks, insurers, large retail chains, energy and trading companies, telecommunications companies, and airlines,” Orbán said, in an effort to compensate for inflation blamed on the war in Ukraine as well as to fund further defence spending.
On June 10, Budapest municipality (Budapest Főváros Kormányhivatala - BFKH) launched a consumer protection investigation against Ryanair for pledging to pass the costs of the tax on to passengers, and on August 8 it duly imposed the fine as the authority had “found that the airline committed a violation of the law because it deceived consumers with its unfair commercial practices.”
The country’s justice minister, Judit Varga, declared in a Facebook post on the same day: “The Ministry of Justice, as the professional managing body, has been closely following the investigation, which has resulted in the Hungarian Authority for Consumer Protection today finding a violation of consumer rules. [...] As the government has promised, we will protect the Hungarian people and launch a consumer protection investigation in every case where the extra profit tax is passed on.”
She added: “Wartime inflation and the economic situation requires that whichever multinational companies make extra profits should pay their share of the costs of the protection of utility cost reduction and national defence! In Hungary, the laws apply to everyone. Any evasion or passing on of extra profits will continue to be addressed by consumer protection investigations and fines!”
Ryanair told ch-aviation in its own statement that it “will immediately appeal any baseless fine raised by the Hungarian Consumer Protection Agency. As the Hungarian Govt is well aware, EU Reg 1008/2008 allows all EU airlines the freedom to set airfares for their intra-EU air services as they so choose, without any interference from national govts or their consumer protection agencies. This EU law prohibits the Hungarian Govt from introducing retrospective travel taxes while attempting to unlawfully limit the right of airlines to pass such unjustified taxes onto passengers. If necessary, Ryanair will appeal this matter to the EU courts.”
Companies have so far been reluctant to challenge the tax. Budapest-based Wizz Air has merely commented that it will hamper the recovery of the travel and tourism sector as the airline industry struggles to return to pre-Covid revenue and profitability levels.
