Ryanair Under Investigation: The Impact of Market Dominance and Regulatory Challenges

Italy's competition authority has initiated an inquiry into Ryanair, a budget airline, over potential "abuse of a dominant market position". This marks yet another regulatory hurdle in Italy for Europe's leading airline. Ryanair, which has grown to be the top carrier in Italy, is currently embroiled in a disagreement with the Italian government over attempts to control the cost of peak-time domestic flights to its main islands. 


Ryanair announced on Wednesday that its internal Italian flights to Sicily would be reduced by 10% in its upcoming winter schedule, attributing this to the government's proposed price cap. The Italian competition authority suspects that Ryanair is leveraging its dominant position "to extend its power" into other sectors such as hotels and car rentals, negatively impacting travel agencies. 


The airline is accused of restricting travel agencies' ability to purchase tickets from its website, thereby limiting their ability to offer accommodation and transport services alongside plane tickets. The Italian government has requested the same regulator to monitor the price of flights to islands, amending an original decree to cap airfares announced in August. Eddie Wilson, CEO of Ryanair DAC, the largest airline in the Ryanair group, expressed opposition to the measure despite the modification. He also welcomed the antitrust agency's investigation, suggesting it should consider other aspects and "bring transparency for everybody", as reported by the ANSA news agency. 

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During a visit to Sicily, Wilson highlighted Ryanair's expansion of foreign flights to and from the island while pointing out the reduction in domestic routes. He attributed this reduction in domestic growth to the Italian government's "unlawful price cap decree" which restricts airlines' ability to set low airfares. Ryanair has already cut back its domestic schedule for flights to Sardinia over the winter.

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