Antitrust opens probe into flight prices to islands

(ANSA) - ROME, NOV 16 - Italy's competition authority said on Thursday it has launched a fact-finding investigation into the use of pricing algorithms in passenger air transport on routes between the Italian mainland and the island regions of Sicily and Sardinia.
    "This decision is based on the fact that, coinciding with the resumption of demand for passenger air transport starting in 2022, institutional and non-institutional actors have detected high prices in correspondence with periods of peak demand," the antitrust authority said in a statement.
    The competition watchdog said the probe would "focus on the possible negative impact of the use of pricing algorithms on market functioning and the conditions of supply to consumers" as well as on "how airline ticket prices and their various components are communicated to the public".
    The investigation comes after the government of Premier Giorgia Meloni reconsidered controversial new rules concerning air fares on certain domestic routes in its so-called 'Asset' decree, eliminating the price cap of 200% of the average fare and giving the Italian competition authority powers to verify possible abuses particularly on routes to Sicily and Sardinia due to their specific transportation needs.
    "The conduct exercised (by airlines) on the routes to the islands, the period of peak seasonal demand, and prices that are more than 200% above the average fare are considered circumstances and indications that the Authority can take into account," read the technical report accompanying an amendment to the decree presented by the government during the process of conversion into law in parliament.
    Airlines had blasted the price cap, arguing to the European Commission trade body Airlines for Europe (A4E) that it could "set a precedent and lead to a domino effect" as well as "violating" the rights of companies to '"compete wherever possible, set prices and define services as they see fit".
    Ryanair CEO Eddie Wilson also slammed the measure, describing it as "ridiculous, illegal and interfering with the free market, according to European law" and later announcing an eight per cent reduction in the air line's services to and from the Italian island region of Sardinia this winter as a direct result. (ANSA).