Airline Capacity Reduction Threatened by Ryanair Boss Over Potential Tax Increase in France
In a recent development, budget airline Ryanair has announced significant reductions in its operations in France due to a sharp increase in the French air tax. The tax, known as the solidarity tax on airline tickets, has increased from 2.63 euros to 7.40 euros per ticket, leading to an 180% increase.
As a result, Ryanair plans to cut its French winter capacity by about 13%, which equates to approximately 750,000 fewer seats and the cancellation of 25 routes. Three regional airports - Strasbourg, Bergerac, and Brive - will be abandoned by Ryanair for the winter season, and key bases like Paris Beauvais and Marseille will see seat reductions of around 6.5% and 7.4%, respectively.
Ryanair's CEO, Michael O'Leary, has been vocal about the issue, calling the increase "unjustified" for an industry that doesn't make much money. He has accused the French government of maintaining an "excessive" and "astronomical" air tax, arguing that this tax harms route profitability, suppresses traffic growth, and makes France less competitive compared to countries such as Sweden, Hungary, and parts of Italy, where air taxes are being reduced or removed to stimulate traffic and economic recovery.
In response, the French Transport Minister, Philippe Tabarot, has stated that Ryanair should "sweep in front of their own door." He has also dismissed O'Leary's criticism of French air control as a caricature, citing labor disputes and legal decisions as issues with Ryanair's service.
Tabarot previously expressed reservations about making the tax increase permanent in March and did not threaten to increase taxes again in his response. However, O'Leary has threatened to further reduce capacity in France if the government increases the air tax again.
Ryanair's future plans in France depend heavily on government action. The airline has called for a full rollback of the tax to pre-March 2025 levels. Without such changes, Ryanair intends to continue shifting commercial focus and investment away from France to more tax-friendly European markets, thereby limiting capacity and growth opportunities in the French aviation sector.
In a bid to double annual traffic by 2030 in France, O'Leary proposed this plan only if the government removes taxes. However, Tabarot suggested that O'Leary should focus on improving Ryanair's service instead of criticizing the government. He also accused Ryanair of not taking responsibility for its profits.
This tax contention has already led to notable network and capacity cuts planned for the winter 2025 season and beyond. The ongoing dispute between Ryanair and the French government could have significant implications for the aviation industry in France.
- The increase in the French air tax, deemed 'unjustified' by Ryanair's CEO, Michael O'Leary, has led to a reduction in the airline's operations in France, affecting general-news and business.
- In a move that impacts both industry and politics, Ryanair has threatened to further reduce capacity in France if the air tax increases again, signifying a potential shift in its business strategy in the European market.
- The ongoing dispute between Ryanair and the French government over the air tax, which is expected to have significant implications for the aviation industry in France, highlights the complexity of finance and politics intertwined with transportation.
