Ryanair to reduce number of Budapest flights on seven routes this winter

Ryanair is going to reduce the number of its Budapest flights on seven routes this winter season in response to the Hungarian government's recently introduced excess profit tax, Ryanair CEO Michael O'Leary announced in Budapest.

At a press conference on Tuesday, the head of the Irish low-cost airline could not specify which seven routes the airline would cut flights on. He told journalists to check with their press department. Later on, referring to the airline's statement, Index reported that

the affected destinations would be: Amman, Bristol, Pisa, Prague, Sofia, Tel-Aviv and Warsaw.

In a statement distributed prior to the press conference, O'Leary repeatedly called the extra profit tax nonsense and regretted that he could not announce new routes. In spite of this, Budapest is still better off than some other Ryanair hubs such as Athens or Brussels, which are going to be closed for the winter months.

During the press conference, O'Leary stressed several times that he believes that as a result of the government's decisions, Hungary and Budapest will become less competitive compared to other cities in the region. While all neighbouring countries are more concerned with attracting passengers, Budapest is being made a more expensive destination.

O'Leary was asked whether he had sent the book Economics for Dummies to Márton Nagy yet, to which he replied that it had already been mailed. He was also asked if it would have been better for him not to get into a war of words with the Hungarian government, because this way he gave the impression that the head of one of the world's biggest airlines is a "bully". In response to this, O'Leary said it would not have been better for the world's fifth largest airline to remain silent when the Hungarian government was in fact hitting Hungarian passengers with the extra tax.

The Ryanair chief said that despite the cancellations and the reduction of flights, they would not be at a competitive disadvantage against their biggest domestic rival, Wizz Air, which had already made a cut in its own services. Furthermore, he believes Ryanair is a more attractive company, if only because he considers himself to be a better-looking CEO than the head of their competitor. In response to a question, he remained humorous, and thanked Gergely Gulyás for "worrying" about his health when he said that O'Leary probably had too much alcohol when he was young.

Responding to a journalist's question, he said that the decision to cancel flights and reduce their number on some lines would not affect their work force this season.

Somewhat unusually, Ryanair organised a press conference in the Hungarian capital, so it was expected that O'Leary would make a major announcement – especially in light of the preceding events. Ryanair is the only company among those hit by the summer tax surcharge to have been in public conflict with the Hungarian government, and recently they have made a decision that could be interpreted as a tangible countermeasure: they cancelled some of their routes leaving from Budapest.

The tension between the government and the company (and O'Leary personally) has been ongoing since the announcement of the surcharge tax, known as the "excess profit tax". According to this, airlines will have to pay a new tax to the state based on the number of passengers departing from Hungary. The tax is set at 3,900 forints (9,8 euros) per passenger for flights to European destinations and 9,750 (24,6 euros) for other destinations. After the measure was announced, Ryanair first called the extra profit tax nonsense in a statement, and then Mr O'Leary criticised the Minister for Economic Development, Márton Nagy.

According to the company, the measure is nonsense because "the Hungarian government wants to impose a tax on extra profits that do not exist in the sector because of the coronavirus epidemic and the Russian-Ukrainian war". The Irish low-cost carrier reported a loss of €355 million in the fiscal year ending in March, but this year's high season has been another strong one for airlines, with many passengers returning after years of forced closures.

The day after the original announcement, Ryanair informed passengers that they would charge the tax to them.

Nagy responded to being called an idiot by saying that this style was unacceptable and that he hoped the airline doesn't treat passengers' complaints with the same arrogance. The company director, known for his blunt communication, was unimpressed. Next he said that the PM's Chief of Staff Gergely Gulyás and Márton Nagy were like Dumb and Dumber. Then Tamás Deutsch, Hungarian MEP and a free-spoken man himself joined the party, calling the Ryanair CEO a "wanker", and Gulyás said that O'Leary most likely had too much alcohol when he was young. The company has been the subject of a consumer protection procedure initiated by Justice Minister Judit Varga, who said in an interview that "Ryanair's attitude will have consequences".

So far it has been a game of words, but since August there have been specific steps taken as well. On 8 August, the procedure resulted in Ryanair being fined 300 million forints for passing on the extra tax to passengers. The company immediately appealed against this, arguing that an EU law allows them to pass the tax on to passengers. The outcome of the appeal is still pending.

On 11 August, Ryanair announced that it was cancelling eight of its Budapest destinations: Bordeaux, Bournemouth, Cologne, Kaunas, Krakow, Lappeenranta, Riga, Turin and Cologne will no longer be served by the Irish low-cost carrier beginning in October. The move will reduce the number of Ryanair's Budapest routes from 53 to 45.

Thus, the press conference did not include the kind of major announcement that many had expected, given that the event was being organised in Budapest, where O'Leary himself was attending. In the meantime, however, it has emerged that the CEO is actually holding a small roadshow, including a visit to Vienna today, where he announced 8 new routes.

To watch a video summary of the Budapest press conference of Ryanair's CEO, click on the link below: