All Ryanair’s flaws

8 October 20237 months ago babelfish

The AGCM has opened an investigation into Ryanair for abuse of a dominant position aimed at excluding travel agencies from ticket sales services

Abuse of a dominant position of an exclusionary nature. On this hypothesis, the Competition and Market Authority has opened an investigation into the actions of Ryanair, the leading operator in scheduled air transport for passengers in Italy (more than 34% in national connections and international connections to and from Italy)

THE FACTS: RYANAIR WOULD TAKE ADVANTAGE OF THE DOMINANT POSITION TO THE DAMAGE OF TRAVEL AGENCIES

The AGCM hypothesized in its provision that the Irish low cost "would leverage the dominant position held in the markets in which it operates to extend its power also in the offer of other tourist services (for example hotels and car rental) to the detriment of the agencies travel – online and offline – and the customers who use them to purchase these services". How? Making it very difficult for travel agency operators to book airline tickets for their customers.

WHO REPORTED THE FACTS

The following people reported the facts to the AGCM:

the Italian Association of Travel Agents, the trade association which has 1,900 traditional travel agencies located in all regions of Italy, 8,500 points of sale representing over 35% of travel agencies;
the Federation of Organized Tourism which brings together 1,900 members and, with around 80 companies active at a national level and others on a territorial basis, brings together both large companies with thousands of employees and micro-enterprises;
the Lombardy Codes Association – Center for Citizen's Rights which operates as the most representative Association at a regional level of the interests and rights of users and consumers.

THE TWO ROADS THAT RYANAIR WOULD USE TO COMPLICATE THE WORK OF TRAVEL AGENCIES

Ryanair would have hindered travel agencies in two ways.

On the one hand, Ryanair seems to hinder the purchase of airline tickets directly from its website by agencies. “From a substantial point of view, once the booking has been identified as coming from a travel agency, Ryanair would implement a series of behaviors aimed at blocking or making more difficult the use of the service purchased – we read in the investigation -. In particular, Ryanair requires the direct intervention of the passenger to unblock the booking and conveys to the latter denigrating and untruthful information with the aim of dissuading him from using travel agencies to purchase Ryanair tickets".

RYANAIR: MORE EXPENSIVE TICKETS FOR TRAVEL AGENCIES ON GDS PLATFORMS

On the other hand, the Irish low cost "allows the purchase of the same only to traditional agencies via the GDS platform at conditions that would be far worse in terms of price, breadth of offer and post-sale management of the ticket".

For about two-three years, Ryanair has also made its flights available on the Global Distribution System, computer systems for managing booking and purchasing airline tickets, used by traditional travel agencies, at least the larger ones. Ryanair is present on two of the three active GDS platforms, namely Travelport and Sabre. “Ryanair, however, unlike all other companies, would make its flights available on the GDS at both technical and economic conditions that are worse than those offered on its website – writes the AGCM -. From an economic point of view, from a series of comparative surveys provided by both reporting associations on a plurality of routes, a large price differential is found between the offer present on the site and that available on the GDS, both on the transport service " basic" and on additional services such as additional baggage (carry-on and to be checked in) or priority boarding. In addition to the increase in the prices of individual services, on the GDS screens, at least in some cases, a specific fixed "GDS Service Fee " would be highlighted, amounting to 10 euros in the case of Travelport and 3.3 euros in case of Saber, which would not apply."

THE REQUEST FOR VERIFICATION BY THE CUSTOMER

Ryanair, therefore, tries to limit the activities of travel agencies in the sale of airline tickets "the first purchase made in organizing a holiday and which represent the "access point" for the sale of further services".

The investigation explains well how the "exclusive dominant position" is exercised. When the purchase of a ticket is made through an account that Ryanair links to a travel agency, the company blocks the booking by sending a " Customer verification required" email . This prevents anyone (agency or passenger) from managing this booking and, therefore, from making any purchases of additional services or changes to it, "until the passenger personally undergoes the so-called "verification procedure", allegedly aimed at verifying his identity."

THE COSTS THAT FALL ON PASSENGERS

The "quick check" option is the only one with a certain timing of less than a week and costs 0.59 euros to be paid by the customer. If identity is not verified, it is not possible to proceed with online check-in and the passenger is required to check-in at the airport, paying a supplement of up to 75 euros. Added to this is an attempt to "discredit" travel agencies by sending emails in which Ryanair suggests, for future purchases, to go directly to the ryanair.com website, as explained in some emails which ended up in the AGCM documents: " Insure to only book Ryanair flights and services directly on Ryanair.com or on the Ryanair app. By booking directly with Ryanair, you will always find the lowest price for Ryanair flights and products and the best service ”.

Added to this is that, in the event of a request for refunds, Ryanair would refuse to refund the agency that paid for the ticket due to cancellation of the flight. “The refund procedure – explains the Antitrust – would take place only following the production of a copy of the passengers' identity documents and their domestic utility bill”.

45% OF RYANAIR'S TURNOVER DERIVES FROM "ANCILLARY TOURIST SERVICES"

Within the text of the investigation there is very interesting data on Ryanair's economic interests in the field of "ancillary tourist services". In the last financial year ending in March 2022, the Irish carrier recorded a total turnover of 4,801 million euros. “45% of this figure derives from the sale of other services, which Ryanair calls ancillary (so-called ancillary revenue ) and which include a series of heterogeneous services, such as seat reservations, boarding priority, additional baggage, hotel sales, car rental, insurance etc. – we read in the investigation -. Furthermore, Italy is Ryanair's main country of operation in which it develops 25% of its total turnover, compared to 18% in Spain, 12% in the United Kingdom, 5% in Ireland and 40% in together with the other European countries”.

This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/smartcity/tutte-le-magagne-di-ryanair/ on Sun, 08 Oct 2023 05:31:24 +0000.