Minimum ticket prices could fail due to EU law

Boarding pass (Photo: Pixabay).
Boarding pass (Photo: Pixabay).

Minimum ticket prices could fail due to EU law

Boarding pass (Photo: Pixabay).
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State Secretary Magnus Brunner (ÖVP) is now using a different wording and appeasing: It would not really be a question of minimum prices, but simply oblige the airlines to pass on all taxes, fees and charges to ticket buyers.

Austria will introduce minimum prices for flight tickets “before summer” and thus take on “a pioneering role in Europe”. No ticket should cost less than 40 euros. This was announced by Environment and Transport Minister Leonore Gewesseler (Greens) in the middle of the month. Ryanair / Lauda and Wizzair just made fun of it. But now, of all people, Magnus Brunner (ÖVP), State Secretary in the Ministry of Transport, “de facto” no longer wants to know anything about “minimum prices”.

In an interview with the daily Kurier, the politician said that there was “no de facto minimum price”. The only aim is to oblige the airlines to ensure that the taxes, fees and charges are passed on in full to the passengers. A corresponding concept is already in place and, according to Magnus Brunner, it is of the opinion that it “complies with European law”. As a possible point in time, he named “maybe in autumn”.

In principle, entrepreneurs are tax debtors and theoretically it is possible for them to pay the tax burden for their customers. Outside of the aviation industry, however, this does not even occur in decoy offers from furniture stores. This is because only a percentage price reduction is granted, but the VAT will still be charged despite advertising to the contrary.

Nevertheless, the Green Environment Minister's plan is likely to cause problems under European law, because it would be an Austrian solo effort and not an EU-wide regulation. Due to very old agreements, it is also difficult to persuade airlines with non-Austrian AOC to comply with a possible national special regulation.

Lawyer and private lecturer Christian F. Schneider told the daily newspaper “Die Presse” that he was of the opinion that “what the government is planning is certainly not in conformity with EU law”. He also refers to a decision by the European Court of Justice. Spain wanted to prohibit the low-cost airline Vueling from charging extra fees for checking in luggage, but failed before the ECJ.

Schneider also referred to the “Presse” on EU regulation 1008/2008, which would only allow airlines to intervene in the price freedom of airlines in the event of “public service obligations”. This could be the case, for example, if it is a so-called PSO route. In this case, subsidies are given for the operation of a route. Occasionally, the ticket prices for end consumers are regulated in the respective tenders. This is actually intended to supply remote regions or islands if this would not be economically viable without subsidies.

Due to the above-mentioned EU regulation, but also the constant case law of the European Court of Justice, which is extremely friendly for airlines in terms of pricing by airlines, Schneider says: "A nationwide minimum price would by no means be permissible."

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