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What does Italy’s new flight price cap mean for passengers?

Airlines reacted angrily this week to news that the Italian government plans to cap the cost of flights, particularly to the islands of Sicily and Sardinia - but can they really do this and what impact will it have on prices?

Airline strike in Italy
Photo by Alberto PIZZOLI / AFP

Italy’s government approved a decree on Monday which, among other things, aims to clamp down on the use of algorithms to set flight prices which ministers say are unfairly high.

The move came after accusations that airlines’ use of algorithms was behind the particularly high cost of flights connecting the mainland to the islands of Sicily and Sardinia during peak travel periods.

READ ALSO: Costly flights, few trains: What’s travel like between Sicily and mainland Italy?

With few realistic alternatives to flying, ministers say inflated costs have left Italians who are originally from Sicily and Sardinia but live elsewhere out of pocket when visiting relatives in their home cities.

Italy’s business minister, Adolfo Urso, on Monday hailed the law as “the end of the algorithms used by carriers to determine the price of tickets”.

But critics of the new decree say it won’t make any real difference, while others suggest the decree is likely to be watered down before – or if – it ever becomes law.

The decree text says that airlines’ use of so-called dynamic pricing systems must not result in ticket prices that are “200 percent higher than the average flight fare”

The rule applies on “domestic routes connecting with the islands” and “during periods of peak demand linked to seasonality, or in conjunction with a national state of emergency”, the decree text states.

In addition, it bars airlines from using web profiling tools to determine that it should charge some customers higher prices than others, saying this is “considered an unfair commercial practice”.

Airlines reacted furiously to the decree’s approval this week, with Ryanair CEO Eddie Wilson on Wednesday calling it “ridiculous” and “illegal”.

He said in an interview with news agency Ansa that the attempt to regulate airlines’ use of algorithms went against EU free market laws and must be scrapped.

“If it isn’t, there will be an impact on Ryanair’s ability to operate in Italy,” he warned.

Wilson also said that an accusation by Sicily’s regional governor, Renato Schifani, that Ryanair was involved in a ”price cartel” with other airlines was “nothing but rubbish”.

Wilson had earlier on Wednesday met with business minister Urso, who told Ansa he was “willing to meet other companies to see whether the measure can be improved during its conversion into law in parliament.”

Italy’s parliament now has two months to convert the decree into law, during which time it can undergo significant changes.

But the head of Italy’s national consumers’ union, Massimiliano Dona, on Wednesday told media the decree “wouldn’t make any difference”, adding that the government was just blowing “smoke in the eyes of citizens”.

If it became law, he said, the price cap would only apply in the case of “exceptionally expensive” tickets, and it could also become “an incentive to raise prices“.

Italy’s competition watchdog last year launched an investigation into claims that airlines had deliberately raised fares on routes linking mainland Italy with Sicily during the Christmas holidays.

The investigation involved Ryanair, Wizzair, easyJet and ITA Airways, the state-owned successor of former flag carrier Alitalia.

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STRIKES

UPDATE: Italy’s government postpones nationwide rail strike on Sunday

A 23-hour nationwide rail strike planned for Sunday, May 19th was postponed on Thursday following orders from Italy's transport ministry.

UPDATE: Italy's government postpones nationwide rail strike on Sunday

Passengers travelling across Italy by train were expected to face disruption this weekend as staff at state-owned railway operator Ferrovie dello Stato – which includes Trenitalia, Trenord and Trenitalia Tper – and private company Italo planned to strike from 3am on Sunday, May 19th to 2am on Monday, May 20th, for a total of 23 hours.

But Italy’s transport ministry on Thursday issued an injunction postponing the walkout to a future date, saying that the protest may have resulted in “major repercussions and public order and safety issues” at the Emilia Romagna Formula 1 Grand Prix over the weekend.

READ ALSO: Italy’s national train strike on Sunday postponed after government order

The walkout had been called by the PdM/PdB transport union in mid-April to demand the renewal of collective labour agreements in the rail transport sector.

The planned protest was set to affect all types of rail travel, from long-distance services to regional and local ones, with passengers in multiple areas of the country expected to face delays and/or cancellations. 

Staff at national rail operator Trenitalia, private long-distance operator Italo and regional train companies Trenord and Trenitalia Tper were all expected to take part in the walkout.

As of Friday morning, the PdM/PdB union had not yet issued a response and there was no detail as to when the walkout would take place.

READ ALSO: The transport strikes that will hit travel in Italy in May 2024

Some Italian media reports on Friday said that rail workers may openly challenge the injunction and go ahead with the strike on Sunday, but there was no statement from the PdM/PdB union nor the involved rail operators supporting this claim. 

Keep up with the latest updates in The Local’s strike news section.

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