2023-08-09 16:43:38
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.
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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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