Low-cost carrier Ryanair is to close two of its operational bases in Italy and suspend all operations to one city as a result of a 40 per cent increase in passenger departure taxes in the country. The revised Italian Council Tax levied on air passengers raises costs from €6.5 to €9 and has been changed to help subsidise layoffs at former flagship carrier Alitalia.
The budget carrier is closing its bases at Alghero’s Riviera del Corallo Airport in Sardinia and Pescara’s Abruzzo Airport from the start of the winter schedule in late October 2016, while it has also emerged that it will end all flights to Sant'Anna Airport serving Crotone in Calabria, where it is the sole scheduled operator.
Ryanair said in a statement that from October it would drop 16 routes and 600 jobs after the Italian government’s tax hike. However, analysis of flight schedules from OAG by our Airline Route blog shows that the cuts are actually more pronounced, especially when you consider routes that have already been removed from the airline’s summer 2016 schedule.
It appears that with a schedule that is dominated by seasonal routes, from winter 2016/2017 Ryanair will only operate to Alghero from the three domestic markets of Bergamo, Bologna and Pisa and to Pescara from Bergamo and an international link from Brussels Charleroi.
This will mean the closure of routes at Alghero to/from Bratislava, Eindhoven and London Stansted and seasonal routes to/from Brussels Charleroi, Frankfurt Hahn and Memmingen. A further 13 markets are also not being served at Alghero this summer – these comprise Cuneo, Dortmund, Dublin, Dusseldorf Weeze, Girona, Gothenburg, Madrid, Paris Beauvais, Rome Ciampino, Stockholm Skavsta, Trieste, Turin, Venice Treviso.
At Pescara links to/from Frankfurt Hahn, London Stansted and Paris Beauvais will cease alongside seasonal flights to/from Dusseldorf Weeze and Girona, while at Crotone domestic links to/from Milan Bergamo, Pisa and Rome (which will switch from Ciampino to Fiumcino this summer) will close.
"Ryanair had no choice but to close two of its 15 Italian bases, Alghero and Pescara, and move its aircraft, pilots and crews to countries that have lower tourism costs," said David O'Brien, Chief Commercial Officer, Ryanair in a statement issued to the Italian market.
The tax increase will "seriously damage Italian tourism," according to O'Brien, who appealed for the government to eliminate the tax, which he said would “hand a golden opportunity for growth to destinations in Spain, Portugal and Greece that have lower tourism costs".
The airline estimates that cutting routes from Alghero and from Pescara on Italy's Adriatic coast and all of its domestic service in the southern city of Crotone will cause 600 job losses and 800,000 client losses. However, it will not mean a cull of routes across Italy and four new routes from Rome to Sofia, Bulgaria; Nuremberg, Germany; Prague, Czech Republic and Lanzarote in the Canary Islands have been announced for winter 2016/2017.
Industry body International Air Transport Association (IATA) has also weighed into the debate upon this month’s announcement of global airline passenger traffic for December 2015 and the full calendar year. Aviation delivered strong results for the global economy in 2015, enabling connectivity and helping to drive economic development, but Tony Tyler, IATA’s Director General and Chief Executive Officer noted that governments need to better understand the economic value of the industry.
“The value of aviation is well understood by friends and families whom aviation brings together, by business travellers meeting clients in distant cities, and particularly by those for whom aviation is a lifeline in times of crisis. However, it is very disappointing to see that some governments still wrongly believe that the value of taxes and charges that can be extracted from air transport outweighs the benefits—economic and social—of connectivity,” he said.
“The most recent example is the dramatic increase in the Italian Council Tax levied on air passengers. This 33-38 per cent hike will damage Italian economic competitiveness, reduce passenger numbers by over 755,000 and GDP by €146 million per year. An estimated 2,300 jobs a year will be lost. At a time when the global economy is showing signs of weakening, governments should be looking for ways to stimulate spending, not discourage it," he added.
Ryanair has served Alghero and Pescara for more than ten years, while flights to Crotone were first introduced in winter 2013/2014. At its peak the airline has offered over 560,000 summer seats from Alghero, 220,000 from Pescara and over 100,000 from Crotone.
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