Ryanair calls Hungary's windfall tax "idiotic"

Transport

Discount airline Ryanair called on Hungary's Minister of Economic Development Márton Nagy to explain why airlines that reported record losses due to COVID and the war in Ukraine have to pay an excess profit tax, according to a press release published on the airline's website.

In the press release, the airline said that the new tax introduced by Hungary is a "highway robbery by a government that is completely out of touch with reality".

The airline argued that while other EU governments are cutting travel taxes/airport charges to recover traffic, tourism and jobs post COVID, Hungary's economic development minister is following a "new and failed economic strategy of imposing ‘excess profits’ tax on loss-making airlines like Ryanair and Wizz, which will further reduce the competitiveness of Hungary’s air travel and tourism industries."

Ryanair welcomed the proposed consumer protection investigation and called on the Budapest City Council to extend this probe to investigate how the Hungarian gov't is introducing an ‘excess profits’ tax on a loss-making industry such as airlines.

"Perhaps Minister Nagy can explain why this idiotic tax is being imposed on the loss-making airline sector," the press release said.

Michael O'Leary, CEO of Ryanair, noted, "One can understand why the Hungarians might impose an excess profits tax on the oil and gas sectors, who are making windfall profits as a result of Russia’s illegal invasion of Ukraine. But to extend this ‘excess profits’ tax to a loss-making industry like air travel, which is struggling to recover from two years of COVID, and the more recent impacts of Russia’s invasion of Ukraine, shows that Minister Nagy has forgotten his economics."

He attacked Nagy, saying that "We will be sending him a new booklet ‘Economics for Dummies’, which we hope he will study so he can now explain why an ‘excess profits' tax is being imposed on a loss-making industry like airlines. These taxes cannot be borne by loss-making airlines, hard-pressed passengers, or their families, and will therefore lead to a dramatic fall in air traffic in Hungary at a time when Hungary’s tourism sector is preparing for post-COVID recovery."

Economic development minister criticizes Ryanair comments

Responding to the airline's comments, Nagy said he hoped the airline doesn't treat its customer complaints "with such arrogance", according to a report by state news wire MTI.

"If only the airline was so quick to respond when Hungarians make customer complaints," he added.

"We don't understand the double standard. If Ryanair pays the same kind of tax, in a law-abiding manner, without issue - and without signaling any kind of problem - in places such as Germany, the Netherlands, Sweden, and France, what is the matter specifically with the Hungarian process?" Nagy asked.

While acknowledging that a multinational company protects its profits, Nagy said "fair and law-abiding behavior is expected of everyone - Ryanair, too".

"Whoever fails to comply will face action by the Hungarian authorities," he added.

Nagy added that the style of the comments made by Ryanair's CEO is "unacceptable" and "leaves much to be desired".

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