Airline Ticket Taxes: Should Ryanair CEO's New Threats Be Taken Seriously?

Ryanair's boss's outburst over the tripling of the solidarity tax on airline tickets is causing concern. Once again, Michael O'Leary has taken a harsh swipe at France and threatened to further scale back its operations.

For two weeks, the low-cost airline Ryanair has been warning: it will stop serving Bergerac, Brive, and Strasbourg. In total, 13% of its capacity in France will disappear. But on Sunday, August 10, in the columns of Le Parisien , Michael O-Leary, the CEO of Ryanair, said he was ready to go even further. While the Ryanair boss must be recognized for his talent for provocation, "it's a listed company that can't announce anything to its shareholders, but it makes an economic calculation," explains Arnaud Aymé, an aviation specialist at Sia.

For Ryanair, the equation is simple: on each ticket sold, the margin is very low. This new tax represents an additional 5 euros on a ticket. It is therefore impossible to pass it on, according to the company, because the reason for its success is simple: very low prices: 40 euros on average per seat, compared to 150 euros for a traditional airline like Air France or Lufthansa, according to the Sia consultancy. France is not Ryanair's top destination in Europe; it's only fifth. And what's more, the company lacks aircraft; its fleet is too small. The group is waiting for orders from Boeing, which the latter is having great difficulty delivering. So it will shift its aircraft to routes it considers more profitable.

According to Arnaud Aymé, other airlines could be tempted to do the same. This new tax won't have an impact on major French destinations like Paris and Nice, but it will on smaller ones. The head of La Rochelle airport and president of the French Airports Union warned back in January: "Airplanes that divert from French airports will fly elsewhere, in other countries anyway."

The additional €5 tax was introduced to encourage users to prefer less polluting modes of transport. According to Ademe, a journey between Paris and Barcelona, for example, emits 70 times more greenhouse gases by plane than by train. This €5 solidarity tax therefore makes ecological sense, provided it is used either to green air transport, provided that trains are available, with competitive prices on destinations covered by the low-cost system, or to finance rail. But this is not the case. Today, this tax is simply intended to stem the deficit.