Ryanair, Europe’s No.1 airline, today (Tues, 23 Dec) instructed its lawyers to immediately appeal both the bizarre/unsound ruling and the €256m fine, unjustly levied by the Italian Competition Authority (AGCM), which seeks to ignore – and overturn – the Jan 2024 Precedent Ruling of the Milan Court, which declared that Ryanair’s direct distribution model “undoubtedly benefits consumers” and leads to “competitive fares”. Today’s Ruling validates Ryanair’s current distribution agreements, which guarantee price transparency for consumers, and safeguards the continuing availability of the lowest promotional fares on ryanair.com. The AGCM’s baseless efforts to redefine a period of time after the Milan Court Ruling, and to wrongly claim that Ryanair has a dominant position in air services to/from Italy will be overturned. This Ruling and fine are legally unsound, and will be overturned on appeal.
Ryanair has campaigned for many years to offer consumers the lowest fares by booking directly on the ryanair.com website. This direct distribution model was ruled to “undoubtedly benefits consumers” by the Milan Court, as recently as Jan 2024. However, under pressure from a Spanish OTA (which has repeatedly overcharged unsuspecting consumers), and a tiny number of bricks and mortar travel agents in Italy, the AGCM has today issued a Ruling (and this absurd fine), which flies in the face of the Jan 2024 Milan Court Ruling.
In order to invent this legally unsound Ruling, the AGCM has ignored the fact of Ryanair’s non-dominant (just over 30%) share of the Italian market, by gerrymandering to exclude both long haul air travel, and short haul air access to a number of other countries, so that it could invent this claim that Ryanair holds a dominant position in the Italian air travel market. It also seeks to exclude competing rail, bus, ferry and motorway travel from the market definition, in what is clearly an invented, but untenable market definition.
The AGCM Ruling appears to accept that Ryanair’s current approved OTA and Travel Agent Direct agreements, which allow all OTAs and bricks and mortar travel agents “cost free” unfettered access to Ryanair’s airfares (with the sole exception of Ryanair’s promotional fares) as long as they agree not to overcharge consumers when selling Ryanair’s fares and ancillary services, comply with competition law. Nevertheless, this contorted ruling and its absurd fine flies in the face of the Milan Court decision of Jan 2024, and can only be the product of a biased and unsound analysis of Ryanair’s pro-consumer pricing in every market in Italy in which Ryanair operates.
Ryanair’s CEO Michael O’Leary said:
“If today’s legally unsound AGCM Ruling and fine is not appealed, then the AGCM proposes to set itself above the Milan Courts in making competition decisions. Ryanair has fought for many years for transparent pricing, and our approved OTA agreements (which have been agreed by almost every large OTA, with the notable exception of one Spanish OTA, who continues to overcharge its customers for flights and ancillary services) are manifestly and clearly pro-consumer.
When Ryanair first started in 1985, 20% of ticket revenues were wasted paying travel agents 10% commissions, and GDS systems 10% commissions, in an industry with high fares, but profit margins of less than 1%. The internet and the ryanair.com website have enabled Ryanair to distribute directly to consumers, and Ryanair has passed on these 20% cost savings in the form of the lowest air fares in Italy and Europe. Today’s AGCM ruling is both legally unsound, and it contradicts the Precedent Milan Court Ruling of January 2024, which declared that Ryanair’s direct distribution model “undoubtedly benefits consumers”.
This AGCM Ruling is an affront to the Precedent Milan Court Ruling, and also an affront to consumer protection and competition law. Ryanair has grown rapidly in Italy – and in many other markets across Europe – by always offering the lowest air fares in every single market in which we operate. This legally baseless AGCM Ruling, and its absurd €256m fine, undermines consumer protection and competition law, and it will be overturned on appeal.
The AGCM should have followed the Jan 2024 Precedent Ruling of the Milan Court, which ruled that Ryanair’s direct distribution model
- “undoubtedly benefit[s] consumers” by leading to lower fares
- is “economically justified in terms of containing operating costs, and eliminating the costs associated with intermediation in ticket sales”
- “contribute[s] to…a direct channel of communication…for any possible need for information and updates on flights”.
Ryanair looks forward to successfully overturning this legally flawed ruling and its absurd €256m fine in the Courts. Today’s Ruling shows that the AGCM cannot be trusted to protect consumers, or uphold competition law, when it can be so easily misled by a tiny number of self-serving bricks & mortar travel agents and a Spanish OTA, making false claims. It is these OTAs and travel agents that the AGCM should be protecting consumers from. Today’s AGCM Ruling cannot ignore, and must respect the Precedent Jan 2024 Ruling of the Milan Court, and the pro-consumer behaviour of Ryanair in every market in Italy in which we operate. Both we and our lawyers, are confident that this flawed, gerrymandered AGCM ruling and its absurd €256m fine will be overturned on appeal.”
