Austria wants to limit minimum ticket price to €40 for one-way flight

10.06.2020 at 16:13

Travel news

Austria’s government announced Monday it would introduce a €40 minimum price for flights in order to combat “social and environmental dumping.”

At a press conference announcing a government-backed rescue package for Austrian Airlines, Environment Minister Leonore Gewessler said:

It will no longer be possible to offer tickets which are cheaper than the actual costs,” referring to the social and environmental impact of the industry.

The dramatic measures brought in by the country’s Green-led coalition include a minimum ticket price of €40 set by the Austrian state on all flights in and out of the country, as well as a €30 fixed levy on passengers travelling less than 350km by plane.

Budget airlines will be disproportionally hit by the new charges, reducing the number of flights and thinning out the competition for struggling Austrian Airlines, which had appealed for financial aid after falling into difficulty.

We can expect exodus of low cost airlines such as Wizz Air, Easyjet and Ryanair’s Laudamotion from Vienna Airport if this rule gets approved.

It’s currently possible to buy very cheap flight tickets for €5 or €10 from Vienna thanks to ongoing ticket sales battle between the low cost competitors.

It’s possible the airlines will shift their operations to nearby airports such as Bratislava, Brno or Budapest, which offer lower airport fees and no such restrictions.

In addition to a minimum fare requirement the government will also tack on an additional €30 surcharge for flights shorter than 350 kilometers.

This move echoes a similar effort in France, where Air France agreed to stop selling point-to-point flights in markets served by high speed trains in under 2.5 hours.

The minimum fare requirement includes all taxes and fees. With the short hop surcharge the rules effective make selling those tickets economically unreasonable in many markets.

Connections to hubs will remain for long-haul service while other trips will likely shift to trains.

Austrian Airlines will receive a 600-million-euro ($677 million) rescue package to mitigate the effects of the coronavirus pandemic, the government said Monday, but also announced these new rules to make aviation more climate-friendly.

Austria will provide 450 million euros of the rescue package, with the rest coming from German giant Lufthansa, of which Austrian Airlines is a subsidiary, Chancellor Sebastian Kurz said.

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