On Wednesday, July 9, 2025, Ryanair issued an ultimatum to the new Austrian government to abolish the “harmful air ticket tax” of 12 euros per passenger and to reduce the “excessive airport charges,” which have increased by over 30 percent at Vienna Airport since the pandemic.
If Austria complies with these demands, Ryanair promises an ambitious investment plan worth one billion US dollars. This plan envisions increasing passenger traffic by 2030 percent to 70 million travelers per year by 12, basing ten additional Boeing 737 Max 200 aircraft in Austria, and creating 300 new, high-paying jobs. However, Ryanair CEO Michael O'Leary threatened to reduce flight services if the government does not meet these demands.
Austria's high costs: A hindrance to growth
According to Ryanair, Austria's current "horrendously high access costs" are hindering the recovery of its air travel sector and making the market unattractive compared to competing EU countries. This is the main reason why Austria – similar to Germany – has still not reached its pre-Covid-pandemic passenger volume levels. Michael O'Leary, Ryanair's outspoken CEO, emphasized that the €12 air passenger tax and the high airport fees , which have increased by over 30 percent in Vienna alone since the pandemic, are major contributing factors.
Compared to other European countries, Austria sees itself at a disadvantage in this regard. Countries such as Sweden and Hungary, as well as regional airports in Italy, are currently abolishing air ticket taxes or reducing their access costs in order to stimulate air traffic and thus economic growth. O'Leary cited Sweden as the most recent example, which abolished its air ticket tax just last week (July 1). In direct response, Ryanair pledged an additional investment of 200 million US dollars, including two additional aircraft, ten new routes, and 60 new jobs. This, O'Leary said, demonstrates how quickly investment and growth follow cost reduction.
Ryanair's promise: billion-dollar investment and job engine
Ryanair presented a detailed investment plan to the new Transport Minister, Peter Hanke, on June 12. This plan aims to increase Austrian passenger traffic from the current seven million to twelve million passengers per year by 2030 , representing a 70 percent increase. To facilitate this growth, Ryanair plans to base ten additional Boeing 737 "Gamechanger" aircraft in Austria, bringing its total fleet there to 28. These modern aircraft are known for their efficiency and are expected to reduce operating costs.
Another key aspect of the investment plan is the promotion of Austria's regional airports . Ryanair promises to boost growth at these airports by 150 percent. This could provide a significant boost, particularly for smaller airports outside Vienna, which often struggle to attract passengers and secure routes. Furthermore, implementing the plan would create 300 new, well-paid jobs for pilots, cabin crew, and technicians, bringing the total number of jobs directly created by Ryanair in Austria to over 1.000 . This would represent a significant contribution to the Austrian economy and the creation of skilled employment.
The ultimatum: consequences of non-cooperation
Ryanair's message is clear and unambiguous: If the Austrian government fails to implement the required cost-cutting measures, ticket prices for Austrian passengers and visitors will rise significantly. Even more drastic is the threat that Ryanair "will be forced to reduce its future flight schedules to Austria." Michael O'Leary emphasized that Ryanair is the only major airline in Europe currently experiencing traffic growth, and that costs are the most important factor in deciding where to base new aircraft and expand services.
O'Leary appealed directly to the new Minister Hanke: "Like Sweden, Austria could benefit significantly from Ryanair's continued growth if the government abolishes the harmful air ticket levy and reduces airport charges." He added: "We have not yet received any feedback from the new Minister, but look forward to a positive response that will enable Ryanair to offer lower ticket prices, rapid growth, and more choice for Austrian passengers and visitors."
The threat to reduce flight capacity is not mere saber-rattling. Ryanair is known for carrying out its threats when market conditions do not meet its expectations. In the past, Ryanair has withdrawn capacity or slowed expansion in other countries when airports or governments were unwilling to meet its demands. For Austria, this would mean that passengers would have to accept fewer direct connections and potentially higher prices with other airlines, which in turn could harm tourism and the country's economy. It is a clear message to the government that the decision regarding the framework conditions for air transport has a direct impact on investment and jobs.
The air ticket tax in Europe: A competitive factor
The air ticket tax is an instrument that is applied differently in different European countries and is often the subject of debate between governments, airlines, and airport operators. The air ticket tax was introduced in Austria in 2011. It is a fee levied per passenger on each departing flight, and the amount can vary depending on the flight distance. For short-haul flights, for example, it is less than for long-haul flights, but the €12 mentioned by Ryanair is a significant amount for low-cost airlines whose business model is based on thin margins.
Ryanair has consistently opposed such taxes, arguing that they undermine the competitiveness of aviation markets, reduce passenger numbers, and ultimately endanger jobs. The airline points to studies showing that air ticket taxes can reduce passenger traffic and economic output in the affected countries. Countries like Sweden, which recently abolished their air ticket taxes, follow this argument, hoping to attract more airlines and tourists by reducing costs. Other countries, like Germany, maintain their air ticket taxes to generate additional government revenue. This divergent approach creates a competitive disadvantage for countries with high taxes, as airlines shift capacity to where operating costs are lower.
A balancing act for the new government
Ryanair's request to the new Austrian government presents it with a balancing act. On the one hand, the potential investment of one billion US dollars and the creation of 300 new jobs are a strong incentive for the domestic economy. The 70 percent growth in passenger traffic would also boost tourism and improve Austria's connections to Europe and the world. On the other hand, the government is under pressure to generate revenue and possibly pursue other political goals.
The decision to abolish the air ticket tax or reduce airport fees would represent a paradigm shift in Austrian aviation policy. It would demonstrate whether the new government is willing to accept short-term revenue losses in exchange for long-term benefits from increased traffic and investment. Ryanair's ultimatum is a clear signal that the airline is strategically planning its growth opportunities in Europe, consistently paying attention to cost factors. It remains to be seen how the new Austrian government will react to this demand and whether it will seize the "growth opportunity" offered by Ryanair.