Transport

Ryanair retorts to Antitrust: 'Online travel agencies are pirates'

CEO O'Leary claims that eDreams, Opodo and Booking want to make price mark-ups to the detriment of consumers

by Gianni Dragoni

Ryanair group CEO Michael O'Leary poses for a photo between cardboard pirate silhouettes representing eDreams, Opodo, Booking and Agcm during the press conference on the online agencies affair and Ryanair 's alleged dominance in Italy, Rome 17 April 2024. ANSA/FABIO FRUSTACI

5' min read

5' min read

Online travel agencies are 'pirates', the Antitrust Authority their captain. Michael O'Leary, Ryanair's volcanic CEO, is attacking the Antitrust Authority, which a few days ago made official the start of 'precautionary proceedings' against Europe's largest low-cost company, accusing it of hindering travel agencies with 'restrictions' on ticket sales. O'Leary is in Rome, tomorrow there will be Ryanair's hearing before the Authority chaired by Roberto Rustichelli. O'leary will not go, Ryanair's head of legal services Juliusz Komarek and a pool of Italian lawyers led by Mario Siragusa will be there.

Pirate Silhouettes

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A black pirate-like flag stands out in the press conference room at a hotel in Via Veneto, with the words in English 'Stop online travel agencies' and 'Protect consumers'. The cardboard silhouettes of four pirates, three instead of their faces have the logos of eDreams, Opodo and Booking, the fourth depicts the pirate Jack Sparrow, the protagonist of the 'Pirates of the Caribbean' saga, with the Italian flag covering his face and a sign on his chest reading 'Agcm', i.e. 'Autorità garante della concorrenza e del mercato'. In short, Rustichelli likened himself to the pirate played by Johnny Depp.

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The Milan Court of Appeal's ruling

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O'Leary criticises online travel agencies (he refers to them by the acronym in English of online travel agencies, Ota) and the Rustichelli Authority. "The Antitrust Authority was misled by the false claims of the pirate Ota. These claims were rejected by the Milan Court of Appeal's ruling of 17 January 2024, which held that Ryanair's sales policy was in favour of consumers'. The text of the decision, which was distributed to the press, states that "in partial acceptance of the appeal brought by Ryanair Dac (formerly Ryanair Ltd) against Viaggiare Srl and in partial reform of the judgment . 7808/2013 issued by the Court of Milan (...) on 4.4 - 4.6.2013, ascertains that the decision of Ryanair Ltd to reserve to itself the sale of airline tickets does not constitute an abuse of dominant position within the meaning of Article 102 Tfue".

Anntitrust 'unable to protect consumers'

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"Agcm's inability to protect Italian consumers is indefensible," says O'Leary, recalling that the carrier has signed "Approved Ota" agreements with several agencies including Loveholidays, Kiwi, Tui, On the Beach, eSky, El Corte Inglés, in order to guarantee "transparent prices" as required by European regulations, as opposed to the actions of those Ota that commit "illegal digital piracy from Ryanair's site and airline price hikes with hidden increases or invented taxes that harm consumers".

Decision on eDreams in 2010

"The Antitrust has already expressed itself with a ruling in 2010 against eDreams but today it says that Ryanair must be stopped: it is true we are big, but because we have grown, we are monopolists on some routes such as those to Reggio Calabria but only because we created them," O'Leary continued. "I don't understand where the Antitrust wants to go: does it want to allow pirate Ota to top up our prices or does it want to limit our growth? In the end it will be the consumer who will pay".

Charges on tickets

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"We have certainly made mistakes over the years but we have been fighting online booking 'pirates' like eDreams for at least a decade: the internet is a Wild West with little consumer protection," says the Irish manager. "At eDreams they claim that we try to block them from selling our tickets. This is not true. We just try to stop them from charging mark-ups on our tickets and ancillary services: then if the customer wants to pay a surcharge for eDreams' service, go ahead. But he must not think that he is giving money to Ryanair'. O'Leary recalls that in the travel sector "there are two business models: Ryanair is trying to avoid in the airline sector what Booking did in the hotel sector, imposing their service and charging 20% more. We originally had to deal with travel agencies charging 10%. But we succeeded in establishing the direct booking model by eliminating the costs of ticket distribution. I am convinced that we are right: more and more TAOs have entered into agreements with us'.

Relations with the government "are good, not with Enac"

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"Somewhere there must be a guiding hand" the attacks on Ryanair. "Maybe I'm too aggressive, I don't deal with bureaucrats as Enac president De Palma would like, but I have good relations with this government, never been better. I met Salvini, the president of Calabria Occhiuto recently came to Dublin after we opened the Reggio Calabria base. We met Urso. And then the Antitrust opens a silly proceeding like the one against us' for the risk of abuse of a dominant position when 'a ruling by the Court of Appeal of Milan in January 2024 explains that we have no dominant position. They should attack the pirate Ota, not us'.

"Useless services" of online agencies

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"eDreams says that their business will collapse without access to Ryanair's tickets, but they have "premium services" with which in the end the consumer actually pays a higher price: there seems to be a small discount on our fares but by adding supposed "privileges" you pay more," notes the Irish manager. "The customer doesn't know that he is paying more for unnecessary services, he thinks they are Ryanair prices."

First for traffic in Italy

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The 2023 traffic figures released by Enac show a strengthening of Ryanair's share of passenger traffic. The company carried 51.59 million passengers out of a total of 197.13 million recorded between arrivals and departures at Italian airports. Ryanair's share of total traffic is 26.2 per cent. Then there are the 5.05 million passengers of Malta Air, a joint venture between Ryanair and the Maltese government. If one does the sum, the passengers become 56.64 million, or 28.7 per cent of the total. To get an idea of the other companies, the Hungarian low-cost Wizz Air carried 17.66 million passengers, Ita Airways 15.17 million.

Italy is the fastest growing market after Covid

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"The market that has grown the most since Covid is the Italian one, mainly thanks to Ryanair, while the one that has grown the least is the German one, because there is the monopoly of Lufthansa. The company is limiting the domestic market by inflating prices, they have convinced the German government to increase airport taxes everywhere and companies have cut flights'. O'Leary points out that 'average fares in Germany have doubled since 2019 while traffic is down 25 per cent'.

Growth

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"In Italy Ryanair continues to have strong growth: in 2019, before the pandemic, we had 67 aircraft on 29 airports and were carrying 41 million passengers. In the meantime, we have opened new bases and new routes and in 2024 we have 103 aircraft on 19 bases, we serve 31 airports and expect to carry 60 million passengers, which is almost 50 per cent growth. We grow because we have the lowest prices. It is one of our fastest growing markets and, despite the antitrust proceedings, we want to continue to invest in Italy'.

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  • Gianni Dragoni

    Gianni DragoniCaporedattore, inviato

    Luogo: Roma

    Lingue parlate: italiano, inglese, francese

    Argomenti: economia, finanza, industria aerospazio, difesa, industria ferroviaria, trasporto aereo, grandi aziende pubbliche, privatizzazioni, bilanci società di calcio, stipendi manager, governance società quotate, conflitti d'interesse

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