Irish budget airline Ryanair saw its profits fall by no less than 80% last quarter due to a fine of more than 255 million euros imposed by the Italian competition authority in December.

Profit after tax amounted to 30 million euros in the three months to the end of December. A year earlier, profits stood at 149 million euros. The regulator claimed that Ryanair abused its dominant position to block travel agencies from accessing its services.

Mandatory facial recognition

According to the Italian regulator AGCM, Ryanair has made it more difficult for travel agencies to offer Ryanair flights alongside flights from other airlines or other services. Ryanair is said to have erected technical barriers, such as mandatory facial recognition for travel agency customers, and blocked booking attempts and payment methods.

Ryanair wants customers to book directly through its own website. According to the airline, travel agencies often use their own email addresses for bookings, which means they cannot contact passengers directly in the event of flight changes or cancellations.

The company also claims that online travel agencies mislead customers by charging extra for services that are free or much cheaper with them, such as seat selection, but the regulator believes that excluding travel agencies makes it difficult for consumers to compare flights from different airlines and therefore hinders competition.

Ryanair appeals

Ryanair considers the fine “unfounded” and has appealed against the penalty. It also claims to protect consumers against “extra charges” imposed by travel agencies.

Although Ryanair is the most aggressive and well-known player in the battle against online travel agencies, it is certainly not the only one. Wizz Air and easyJet also often use measures to discourage intermediaries, as do traditional airlines.

Still solid profits

However, the decline in profits in the past quarter contrasts sharply with operational growth. The number of passengers rose from 44.9 million to  47.5 million in the same period a year earlier, an increase of 6%. Revenue also grew by 9% to 3.2 billion euros.

Ryanair has also raised its expectations for the entire financial year ending in March. The company now expects passenger growth of 4%, to 208 million passengers. Ryanair CEO Michael O’Leary, who recently clashed with Elon Musk, also said that annual profit, excluding one-off items, could reach more than 2.2 billion euros.

By 2034, Ryanair aims to carry 300 million passengers.