Italy’s competition authority (Autorità Garante della Concorrenza e del Mercato - ACGM) has opened an investigation against Ryanair (FR, Dublin International), suspecting it of the “possible abuse of a dominant position” in the market at the expense of travel agencies and consumers, it announced in a statement.
According to the ACGM, Ryanair - now the biggest carrier in Italy by weekly seat capacity - may be harming local travel agencies and consumers by leveraging its dominant position “to extend its market power” in the provision of services such as room reservations and car rentals.
In its “preliminary view” outlined in the statement dated September 20, it claimed that the carrier “appears to impede” travel agencies from buying tickets from its website, restricting their capacity to offer accommodation and transport services alongside air tickets.
“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,” it concluded.
The authority clarified that the investigation had been initiated following a number of reports it had received since May.
Eddie Wilson, Ryanair’s chief executive, said the carrier welcomed the investigation. Commenting on the issue in Palermo during a presentation of the company’s winter season programme, he added, as quoted by Italy’s ANSA news agency: “Let’s hope it’s extended to other aspects [of the business] too so that it leads to transparency for everyone.”
Island fare cap clash
The airline is already in a dispute with the Italian government over Rome’s plan, outlined in a draft decree, to cap prices for domestic flights to Sicily and Sardinia at peak times. On September 20, Ryanair warned it would cut domestic flights to Sicily by 10% in its coming winter schedules in response. Earlier this month, it lodged a complaint with the European Commission on the matter. Ryanair currently operates 110 domestic routes within Italy, according to the ch-aviation capacities module.
Wilson said on the issue that “Italy’s domestic growth has sadly been negatively impacted by the Italian government’s unlawful price cap decree to restrict airlines’ freedom to set low airfares.”
However, the government appeared to row back on the proposal, with Industry Minister Adolfo Urso telling reporters that there would “no longer be a ceiling” on prices although other measures in the decree would remain. The government also modified the decree’s wording by asking the ACGM to police the prices of flights to the islands.
