Italy sets price caps on flights to Sicily and Sardinia – no one’s happy

Either way, the islands’ residents don’t seem to benefit that much from the law

On Monday afternoon, the Italian government adopted a decree that stipulates a limit on the prices that airlines can impose on airfares to Sicily and Sardinia. The legislative move was motivated by reports that it’s been getting increasingly expensive and inconvenient for people to get between the islands and the mainland in the wake of COVID pandemic and inflation crises.

More specifically, the decree bans the use of the so-called “dynamic fixing” method to determine the price of airfares during peak times of the year, such as summer, Easter or Christmas. In reality, dynamic fixing refers to the classical way of defining price categories by increasing prices when there’s a higher demand for the services.

The surge in prices last year has made it impossible for many islanders to get back home and spend the holidays with their families, according to local media reports. And this, even with the fact that residents of Sardinia and Sicily use subsidies for domestic flights to the mainland, based on the principle of “territorial continuity”. The subsidies seek to redress the disadvantage when it comes to liberty of movement for island inhabitants.

Does this clash with European market rules?

The decree has to pass in the Italian parliament before it finally becomes a law, however, it has already stirred many debates and criticism in Italy and abroad.

The two main groups who are voicing their displeasure about the new law are the airlines operating routes to the islands and consumer groups.

The new law stipulates that during high-demand periods the airfares cannot be more than three times the average ticket price during the year. The consumer associations, however, argue that with the surge in prices overall such a limitation has become irrelevant to the consumers.

The airline operators, such as Ryanair, argue, on the other hand, that the legislation contravenes European market laws. Eddie Wilson, the CEO of the Ireland-based low-cost carrier, even described the measures as "ridiculous, populist, illiberal and Soviet-style", according to Il Post.

He threatened that if the decree became law that would actually lead to a reduction of flights to the islands, especially in winter, which in turn would actually mean higher prices overall due to decreased supply.