Hungary fines Ryanair for raising prices to meet tax

BUDAPEST, Hungary (AP) — Hungary has accused Ryanair of consumer protection violations and fined it more than three-quarters of a million euros after the budget carrier raised ticket prices to make facing a tax on what the government calls “extra profits” from industries ranging from airlines to banks.

Justice Minister Judit Varga wrote on Facebook on Monday that an investigation into Ireland-based Ryanair began in June and revealed “unfair trading practices”, triggering a fine of 300 million Hungarian forints (777 058 dollars).

The fine is the first related to the tax, which has led Ryanair and others to raise prices and spark a clash with industry. Hungary said costs should not be passed on to customers.

Ryanair says it will “immediately appeal any unsubstantiated fines”, but has not been notified. He pointed to European Union legislation allowing airlines to set prices for flights within the 27-nation bloc without interference from national governments and said he will appeal to EU courts if necessary.

Prime Minister Viktor Orban’s right-wing nationalist government says sectors from banking to insurance to airlines that have enjoyed “extra profits” from the surge in demand following the COVID-19 pandemic should contribute to the country’s economic recovery. His government blames the war in Ukraine and EU sanctions on Russia for woes such as skyrocketing energy prices, weakening of its currency to record lows and inflation hitting 12.6% in June.

The government said it hoped the tax would raise 815 billion forints ($2.1 billion) to maintain a program that would lower utility bills and strengthen the military.

Economic problems “require that all multinationals that make additional profits pay their share of the costs of air protection and national defense,” Varga wrote on Monday.

Economists said some targeted industries like fossil fuels and banking are making higher profits than usual, but most are not. Ryanair CEO Michael O’Leary called the tax “highway theft” and “stupid”, calling on the government to end it.

Ryanair, British low-cost carrier easyJet and Hungarian low-cost carrier Wizz Air said they would add around 10 euros (dollars) to each ticket to cover the costs of the new tax.

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