As a result of Ryanair raising ticket prices to cover a tax on what the government refers to as “excess revenues,” Hungary has accused the airline of violating consumer protection laws.
HUNGARY’S BUDAPEST (AP) — Budget airline Ryanair increased ticket rates to cover a tax on what the government refers to as “excess profits,” and Hungary accused it of violating consumer protection laws and fined it more than three-quarters of a million euros “of businesses in sectors ranging from banks to aeroplanes.
Justice Minister Judit Varga stated on Facebook on Monday that an inquiry into Ryanair, which is located in Ireland, began in June and uncovered “unfair trading practises, “resulting in a 300,000,000 Hungarian Forint ($777,058) fine.
The penalties are the first associated with the tax, which prompted price increases by Ryanair and others and sparked a spat with business. Costs shouldn’t be passed on to clients, according to Hungary.
Ryanair claims it has not been notified of any fines and will “immediately contest any unfounded fine.” It cited a rule of the European Union that permits airlines to choose the prices for flights inside the 27-nation bloc without interference from national governments, and it threatened to take the matter to EU courts if necessary.
The right-wing nationalist government of Prime Minister Viktor Orban claims that businesses in the banking, insurance and aviation sectors that have reaped “extra profits” as a result of increased demand during the COVID-19 outbreak ought to help the nation’s economy recover. His government attributes problems such as the soaring energy costs, the currency’s record devaluation, and June’s 12.6% inflation rate to the conflict in Ukraine and EU sanctions against Russia.
The levy, according to the government, is intended to generate 815 billion forints ($2.1 billion), which would be used to sustain a programme that lowers citizens’ utility bills and supports the military.
According to Varga’s Monday article, the economic issues “demand that whoever multinational firms make an additional profit should pay their portion of the costs of the overhead protection and the national defence.”
Some businesses that have been targeted, including banking and fossil fuels, are reportedly making higher profits than usual, but most are not, according to economists. Michael O’Leary, CEO of Ryanair, referred to the levy as “highway robbery” and “idiotic,” and he urged the government to abolish it.
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