Meloni government retreats on plan to cap some internal air fares

Italy’s government has pulled back from a plan to cap air fares on certain routes, instead giving the country’s competition authority new powers to police ticket prices following fierce resistance from airlines. Prime Minister Giorgia Meloni’s government outlined a decree last month for price caps on flights between mainland Italy and the islands of Sicily and Sardinia after ticket prices soared this summer. But industry minister Adolfo Urso said on Tuesday the government would submit an amendment that will scrap the original plan to cap fares during the high season at 200% of average prices. Instead, Urso said the government would give “specific and greater powers” to the country’s competition and transportation authorities to monitor air fares on certain routes and to intervene if they consider that prices have jumped too high during peak periods or unforeseen events such as natural disasters. “There won’t be a ceiling, but the reference to +200% remains, as an indicative element . . . so that the competition authority can take action, if it considers it [necessary],” Urso said. The changes represent the latest apparent policy U-turn from the Meloni government, which partially backtracked on a bank windfall tax that spooked markets and drew criticism from the European Central Bank. European airlines had strongly opposed the original proposals to cap fares, which were described as “illegal” under EU law by Ryanair, Europe’s largest airline. Airline bosses had also questioned how the price caps would work in practice, including how the government would define an “average” fare in an era of algorithmic pricing that regularly changes according to supply and demand. Urso said the changes would “overcome the obstacles” in the original plan, and would “achieve the same goal” of controlling high air fares.<br/>