NEWS » Ryanair Cutting Back In Italy due to Italian Taxation?
Ryanair Cutting Back In Italy due to Italian Taxation?
Is Italian tourism threatened by taxation?
Italians always complain of the country's very high taxation, which is now discouraging foreign companies such as Ryanair from operating in the country.
The Italian government this year raised departure taxes by 40 percent, that is to 9 euros per passenger from 6.50 euros, to help subsidise lay-offs of the former flag carrier Alitalia, as a consequence Ryanair has announced that it will cut 16 routes and 600 jobs in Italy.
Reportedly David O'Brien, Ryanair's chief commercial officer, said that Ryanair had no choice but to close two of its 15 Italian bases, Alghero and Pescara, and move its aircraft, pilots and crews to countries that have lower tourism costs.
According to Ryanair the tax increase will seriously damage Italian tourism because of the cutting out of eight routes from the Sardinian city of Alghero, and five from Pescara on Italy's Adriatic coast, together with all of its current service in the southern city of Crotone. This will cause 600 job losses and 800,000 client losses.
Considering that youth unemployment in Italy exceeds 40% and tourism is one of the few sectors that can stimulate the rapid creation of jobs for young people, O'Brien pointed out that Italy has become less competitive and less attractive for airlines and tourists. This year an increasing number of customers will avoid the Middle East and north Africa, preferring to book holidays in the Mediterranean. Italy, with its taxation, will offer a golden opportunity of growth to other destinations, such as Spain, Portugal and Greece, which have lower costs for tourism.
Nevertheless Ryanair said it would add four new routes in winter 2016 from Rome to Sofia, Bulgaria, Nuremberg, Germany, Prague and Lanzarote in the Canary Islands. This will allow to carry more than 9 million clients each year and create 6.900 jobs in the airports of Ciampino and Fiumicino.
Ryanair has also appealed to the Italian government to eliminate this damaging tax increase requesting an urgent meeting with the executive power to save tourism, air traffic, and jobs in Italy.