Dear flights, ENAC praises the government and snubs Ryanair
The high cost of flights determined by the algorithms used by the airlines that led to the rules set out in the latest decree is inflaming the debate. Rags fly between Ryanair's CEO and Minister Urso and the National Civil Aviation Authority (ENAC) takes the government's defense. Facts and controversies
For once, everyone agrees. Right-centre, centre-left and even the National Civil Aviation Authority (ENAC, in the photo the president Pierluigi Di Palma): Ryanair is wrong to attack the part of the omnibus decree concerning the cost of flights, which provides for constraints on the profiling of customers (constraints already envisaged by the rules, according to many jurists ) and algorithms so dear to the airlines, which are literally freaking out about the cost of flights, especially in recent months.
The president of Assoviaggi-Confesercenti, Gianni Rebecchi, in fact said that if there were increases of up to 60% in June, it is also expected that in August they could reach 45% with peaks of 50%.
So here's what happened and the main positions.
WHAT THE DECREE AGAINST CARO-VOLI PROVIDES
The measure contained in the Assets and Investments decree aimed at combating expensive flights prohibits – in some specific cases – the dynamic fixing of tariffs based on the time of booking. It is in fact an algorithm which, by intercepting the traveller's interest in a specific flight, results in an instant increase in fares.
It is therefore forbidden to fix tariffs based on web user profiling or on the device used for national routes connecting with the islands (Sicily and Sardinia) when there are peaks in demand or if the increase leads to a sale price of 200 % higher than the average fare for that route, a condition that extends to all of Italy during a national state of emergency.
RYANAIR FUCKED
If consumers rejoiced at the news, Eddie Wilson, CEO of Ryanair, jumped on his seat. Interviewed by Ansa , he lashed out against the government arguing that the decree is "ridiculous and illegal" because it "interferes with EU free market rules".
"It is populist and Soviet-style stuff" and therefore "to be canceled" for Wilson, who also denied the accusations of signing flights to Sicily and Sardinia. And speaking of the story of the algorithm, he defined it as a fantasy of people "who watch too much Netflix" because at Ryanair "there are no algorithms" and the company "doesn't make customer profiles"…
Finally, Ryanair's CEO threatened both to leave Italy and to appeal to the European Commission, which has already asked our country for more details on the contents of the measure.
URSO'S WONDER AND DISCONCERTION
However, these words caused "astonishment" at Mimit, the Ministry of Enterprise and Made in Italy led by Adolfo Urso (Fratelli d'Italia), who reminded Wilson that "on the use of profiling in the sale of airline tickets there are ample evidence reported by prestigious international journals” and “it is America, therefore, 'not the Soviet State', which has been investigating the phenomenon for many years”.
Urso then said he was "available to also meet the other companies to understand if the provision can be improved in terms of parliamentary conversion".
Furthermore, if for Wilson "the people who are advising Urso know nothing about the airline sector or the economy", the number one at Mimit replied that Ryanair "needs good commercial law advisers, someone who understands competition , market and citizens' rights” since its “intolerance to market rules” has led it to be “sanctioned 11 times in recent years by the competition and market authority”.
THE ENAC SPEAKS
The National Civil Aviation Authority (ENAC) then intervened on the matter, whose president Pierluigi Di Palma stated that "the government did very well to intervene on the cost of flights".
But as Il Foglio observes, Wilson, apart from the words used, is right to say that "if you increase supply, prices decrease, but if you interfere and restrict prices, companies go elsewhere" and “when supply goes down, prices go up”. For Di Palma, however, "sometimes the markets need to be regulated" and "this law serves to set up supervision of market-distorting practices that occur in certain periods, such as peaks in demand during the holidays".
Furthermore, the president of ENAC (National Civil Aviation Authority) is not in the least intimidated by Wilson's threats, neither for the intervention requested from the EU Commission nor for the possibility that Ryanair will ground our country as "the the truth is that the Italian market is worth a lot, they can't leave it”.
THE WORDS OF DI PALMA
Di Palma defends the government's intervention with the decree: "This law – he says – serves to set up a vigilance on market-distorting practices that occur in certain periods, such as peaks in demand during the holidays". The ENAC president replies to the doubts and perplexities that immediately arrived from Brussels. “European officials recall the rule which says that EU carriers freely set air fares for passengers, but they forget that the EU also protects the most fragile territories, including islands. The liberalization of European air transport served precisely this: to lower prices to encourage mobility in the EU for the young generations and to overcome national identity, correlating this thing to the Erasmus programme. A boy from Palermo must be able to reach the European capital, Brussels, at the same time as a French boy of his age, and this must be a right that can be exercised, otherwise we will return to a democracy based on wealth”.
Di Palma recalls : "We told them 'dear companies, pay attention to this artificial intelligence which alone causes an unjustified increase in prices'". The president of ENAC maintains this: "Something in the low cost airlines system has jumped: first they practiced deceptive prices to attract filling up the planes which then stopped, the planes reached a filling level of 80/85 per cent , the strategy of the founder of Ryanair O'Neil was then to sell the remaining tickets at bargain prices, advertising himself for free. Today, however, there are fewer air connections than in 2019 and more passengers, the planes are fuller and prices are exploding, what we were asking was not to reduce revenues, but to change the dynamics: maybe raise the prices a little by lowering the prices subsequent. For example, it is not possible that with the interruption of the high-speed line, the Linate-Rome prices have shot up from 100 to 500 euros in a few hours”.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/smartcity/caro-voli-lenac-elogia-il-governo-e-strapazza-ryanair/ on Fri, 11 Aug 2023 12:19:56 +0000.