Budapest, Hungary – Low-cost carrier Ryanair is up in arms against a new tax introduced by the Hungarian government.
On Wednesday, the airline urged Prime Minister Viktor Orban to scrap the “misguided” windfall tax on departing passengers announced by Hungarian authorities and set to go into effect from July.
The new airline levy is part of Hungary’s so-called “extra profits” tax plan designed to bring over $2 billion through windfall taxes introduced on large private companies, including banks, oil companies and airlines.
The tax would cost passengers an additional €10 to €25 when departing from Hungary, and Ryanair has already announced that it was passing the added cost onto customers themselves, even on bookings made before its introduction.
“It is beyond stupid that the Hungarian government is imposing an ‘extra profits’ tax on the airline industry when profit are non-existent,” the company claimed in a statement.
Pointing out that airlines are barely emerging from more than two years of pandemic, the low-cost giant said that it would have no other choice but to move capacity to other markets in response to Hungary’s new tax plan.
“This unjustified tax on the airline sector (which has been heavily loss-making for the last two years) will be damaging for Hungarian tourism and the economy, which is dependent on air carriers to provide connectivity, tourism and job,” Ryanair said in a statement.
“This ill-timed and ill-advised ‘extra profits’ tax which inexplicably compares the loss-making aviation industry with hugely profitable oil and energy companies, has instantly made Hungary uncompetitive and less attractive to airlines and tourists.”
One of Ryanair’s main competitors in the region, Hungary-based Wizz Air has also criticised the new government tax.
The Irish carrier’s recent figures, however, show that it has already reached and exceeded pre-pandemic levels.
Lasts month, the airline carried over 15 million passengers, more than any other month in its history, and up from only 70,000 and 1.8 million in May 2020 and May 2021 respectively.
Some commentators note that as summer tourism eagerly takes off after two years of Covid-19 pandemic and strict travel restrictions, Ryanair and other low-cost carriers may not be as badly affected by Hungary’s new tax as they claim.