Europe’s airlines clash with Italian premier over planned fare cap

Airlines have called on the European Commission to step into a row over the Italian government’s plan to cap air fares on certain routes, the latest clash between Prime Minister Giorgia Meloni and the corporate world. In addition to a surprise windfall tax on banks, Meloni’s rightwing government last week outlined plans for price caps on flights between mainland Italy and its islands of Sicily and Sardinia after ticket prices soared 70% on those routes. Airlines have responded furiously to Meloni’s proposals, which represent an unusual attempt to cap fares. Trade body Airlines for Europe (A4E) called on Brussels “to clarify with Italy that this intervention impacts the free and deregulated air transport market in Europe”, according to a letter seen by the Financial Times. “We are strongly concerned that if this law is adopted, it could set a precedent and lead to a domino effect resulting in similar regulations being adopted in other EU member states,” A4E managing director Ourania Georgoutsakou wrote.  Capping fares on these routes would “violate” the rights of airlines “to compete wherever possible, set prices and define services as they see fit”, Georgoutsakou said. Under the Italian plan, airfares during the high season would be capped at 200% of average prices while the use of “profiling algorithms” that may impact prices would also be limited, according to a statement from the prime minister’s office. Ryanair, Europe’s largest airline, described Italy’s plans as “illegal” under EU law. The low-cost carrier said the intervention would “have unintended consequences” of raising air fares in the long run by reducing flight and passenger numbers. The commission said last week that it was seeking clarifications from Rome, adding that price capping was rarely an effective means of achieving affordable prices. <br/>