Ryanair Fined €256 Million for Limiting Online Travel Agents, Plans to Appeal

Ryanair, Europe's largest airline, has been slapped with a hefty fine of €256 million (approx. $223 million) by Italy's competition authority for allegedly abusing its dominant market position to restrict the sale of tickets by online travel agents. The authority's investigation revealed that Ryanair had enacted a deliberate strategy designed to create technical barriers for both travel agents and customers, significantly hampering the ability of online platforms to sell Ryanair tickets and instead pushing consumers to purchase directly through its website. The fine pertains to Ryanair's conduct spanning from April 2023 and is expected to apply until at least April 2025. The Italian authority asserted that the airline's actions had not only obstructed online agents from selling tickets for Ryanair flights in tandem with other airlines but also weakened competition in the market. In response to the ruling, Ryanair has vowed to appeal, with CEO Michael O'Leary labeling the decision as "legally flawed". O'Leary, known for his confrontational stance towards travel agents, particularly criticized platforms such as Booking.com, Kiwi, and Kayak, accusing them of exploiting customers with added fees and markups on ticket prices. He even expressed a willingness to endure a drop in ticket sales to curb the practices of these "pirate travel agents". This crackdown on online agents had an immediate impact. Following the abrupt removal of Ryanair flights from these agents' websites in late 2023, the airline witnessed a slump in sales, which contributed to a dip in profits. Despite this setback, Ryanair's valuation soared to a record €31 billion (approx. $27 billion), securing its position as the world's second most valuable airline, trailing only behind Delta Air Lines. O'Leary, who has previously made headlines for his combative remarks toward airports, rivals, and regulators, is also planning on transitioning the leadership of the company to a successor within the next five to ten years. Should he remain with the airline until the end of July 2028, he would receive shares valued at €111 million (approx. $97 million), further solidifying his status as a billionaire through his substantial shareholding. In light of the competition authority's ruling, O'Leary asserted that it undermines both consumer protection and competition law, claiming that the internet and the Ryanair website have empowered the airline to sell directly to consumers. He quoted, "Ryanair has passed on these 20% cost savings in the form of the lowest airfares in Italy and Europe," further emphasizing the airline's commitment to affordable travel. The authority found Ryanair guilty of abusing its dominant position, leveraging its significant market power to curtail the operations of online travel agents. Tactics employed by Ryanair during this period included implementing facial recognition procedures for ticket purchasers via third parties, which they claimed were necessary for security reasons. The airline also intermittently blocked booking attempts by travel agencies - this included blocking payment methods and deleting accounts en masse. To force compliance among these travel agencies, Ryanair established partnership agreements that prohibited the sale of flights in combination with services of other carriers. Only as of April this year did the airline begin to allow agency websites to link with its services, marking an attempt to enable some level of competitive sales. The competition authority has highlighted that these aggressive actions by Ryanair impeded consumer choice and made the purchasing process more complicated and economically burdensome, particularly when combining flights with those of other airlines and associated tourism and insurance services. Related Sources: • Source 1 • Source 2