Ryanair CEO Slams Austrian Aviation Tax and Government Inaction
Michael O'Leary, CEO of Europe's largest low-cost carrier Ryanair, has intensified his criticism of Austria's €12 aviation tax, warning of further reductions in flight operations from Vienna International Airport (VIE). O'Leary has accused Austrian Chancellor Christian Stocker of 'laziness' and Infrastructure Minister Peter Hanke of 'lying' regarding the government's response to Ryanair's investment proposals.
The airline argues that the aviation tax, coupled with high airport fees, renders Austria uncompetitive for budget carriers. Ryanair has already begun scaling back its presence in Vienna, citing these costs as the primary reason.
Details of the Austrian Aviation Tax and its Impact
Austria's aviation tax, initially introduced in 2010 and increased in September 2020, levies €12 per passenger for most European flights and €30 for short-haul flights under 350 kilometers. According to Ryanair, this makes it the third-highest aviation tax in Europe. In 2024, the tax generated approximately €170 million in government revenue.
Ryanair asserts that this levy significantly impacts the competitiveness of budget airlines and discourages investment. The airline claims that Austria's air traffic has failed to recover to pre-COVID-19 levels, attributing this to the 'harmfully high and uncompetitive access costs.' Other low-cost carriers, including Wizz Air, Level, and easyJet, have also reduced or closed their bases in Vienna due to similar concerns.
Ryanair's Investment Proposal and Government Response
O'Leary revealed that Ryanair had presented an investment plan worth €1 billion to the Austrian government. This proposal included basing ten additional Boeing 737 aircraft in Vienna and creating over 500 new jobs, with the aim of increasing passenger traffic to 12 million per year by 2030. However, O'Leary stated that the proposal received little attention, with Chancellor Stocker reportedly calling it 'interesting' but failing to provide a promised response by the end of September.
In response to O'Leary's accusations, Infrastructure Minister Hanke accused the Ryanair CEO of 'confusing blackmail with negotiations.' Hanke maintained that discussions on tax policy were never formally reopened and that no changes to the aviation tax are planned for 2025 or 2026. Chancellor Stocker's office has declined to comment on the controversy.
Consequences and Future Outlook
Ryanair has already withdrawn three aircraft for the winter 2025 season and canceled three routes from Vienna, including connections to Billund, Santander, and Tallinn. The airline plans to transfer freed-up capacity to other European destinations with lower costs, such as Bratislava, Italy, and Hungary, where governments have abolished or reduced air passenger duties.
Aviation analysts suggest that unless Austria revises its aviation tax, it risks losing its position as a Central European low-cost hub and diverting traffic to neighboring countries with more favorable fee structures. Vienna Airport itself has acknowledged the 'necessity' of abolishing or significantly reducing the state aviation tax and plans to reduce its own fees starting next year.
5 Comments
Africa
Finding a balance between environmental responsibility and economic growth is crucial for any nation. Austria needs to consider if its current aviation tax is achieving its intended goals or merely driving business and tourists elsewhere, without a net positive outcome.
ZmeeLove
It's understandable that the government wants to generate revenue and address environmental concerns with an aviation tax. However, if it pushes all low-cost traffic to neighboring countries, the environmental benefit might be negated, and Austria loses out economically.
Muchacho
Typical O'Leary bullying. Don't cave in, Austria!
Habibi
Let them leave. We don't need their cheap flights if it means environmental damage.
Muchacho
O'Leary's offer of jobs and investment sounds promising on the surface, but one must question the long-term sustainability and quality of such growth. Still, completely ignoring the proposal seems like a missed opportunity for dialogue.