Ryanair Condemns Hungarian Govt’s Idiotic ‘Excess Profits’ Tax | Hacker News Reader

Ryanair Condemns Hungarian Govt’s Idiotic ‘Excess Profits’ Tax

corporate.ryanair.com

50 pointshaunter87 comments

>This is not an ‘excess profits’ tax, it is just highway robbery by a Govt. that is completely out of touch with reality

Wow, this is an aggressive statement by a corporate entity. I know Ryanair has always been more outspoken than other corporate entities (besides perhaps Ben & Jerry's) but this was quite surprising to read

The CEO is notoriously outspoken, it doesn't surprise me at all.

It's kind of refreshing to see something that hasn't passed through a public relations filter.

For some colourful viewing, here's the CEO proposing a "standing cabin" on planes, and asserting that "the customer is nearly always wrong": https://youtu.be/xmGRGv2jEkg

Pretty safe to ignore any corporate statements by Ryanair.

Why

The CEO has a history of being a bullshitter.

https://en.wikipedia.org/wiki/Michael_O%27Leary_(businessman...

> In 2007, O'Leary was forced to retract a claim that Ryanair had cut emissions of carbon dioxide by half over the previous five years because the claim should have been that emissions "per passenger" had been cut by half. He has been reported to have impersonated a journalist in an attempt to find information passed on to a newspaper following a safety incident on a Ryanair flight. On occasion, he has apologised for personal attacks under threat of legal action. He has been criticised by a judge for lying, who said he was lucky not to be found guilty of contempt of court. He has also been criticised for dismissing concerns about climate change as "complete nonsense".

> Reacting to the decision to close European airspace in April 2010 over worries about the volcanic ash plume from an erupting Icelandic volcano, O'Leary falsely said, "There was no ash cloud. It was mythical. It's become evident the airspace closure was completely unnecessary."

That's still an impressive accomplishment. So I'd be inclined to believe that was just an honest mistake.

Emissions per passenger is a fake number, because it folds in flight distance, which has no business in the calculation.

Absolute emissions and emissions per passenger kilometer are real numbers.

> It's kind of refreshing to see something that hasn't passed through a public relations filter.

It's one thing if the owner of a local bar thinks it a good idea to throw around swear words and being edgy in general. Might bring him some new business, might lose him some old business.

But owners of companies worth dozens of billions of dollars? They might want to rein in their executives a bit. Unprofessionalism always reflects back on the institution, even if Elon Musk and to a lesser degree Jeff Bezos (=we don't need to make a profit or pay out dividends) have proven themselves to be the exception to the rule.

"Unprofessional" companies like tesla and ryanair are the only companies where I put even the slightest faith in the sincereness of their public statements. I know that the truthfulness of a public statement by any "professional" company is completely incidental to the actual internal state of the company, and is calculated to communicate as little useful information as possible, while managing PR expectations.

> "Unprofessional" companies like tesla and ryanair are the only companies where I put even the slightest faith in the sincereness of their public statements.

At least Tesla is widely known for wildly fluctuating stock prices. Every time Elon posts some stupid shit on Twitter, the stock tanks.

Corporate officials have responsibility for their shareholders, and the SEC has tried more than once to teach Musk that lesson. Tesla may be a revolutionary when it comes to cars, but their stock is far from what should be in anyone's private portfolio.

>It's kind of refreshing to see something that hasn't passed through a public relations filter.

That was a big part of Trump's appeal to his fan base as well...however that kind of talk is not becoming of someone in a prestigious position like president (or CEO) and ruins their credibility to get things done.

Hasn't been a problem for Musk or O'Leary when it comes to getting stuff done.

It has other downsides sure, GSD isn't one of them.

They GSD despite their bad personalities, not because of them. They are the exception to the rule.

I don’t think that is necessarily true. There is a huge difference between calling a cow a cow, trying to make the cow sound like a golden calf, and trying to call a pig a cow.

Trump did a lot of the latter, corporate entities do a lot of the second, and it would often be nice if they did more of the first.

does it tho?

he’s doing alright

I don't think the CEO of a private company is comparable to a politician, particularly a world leader.

Given O'Leary has been CEO since the 1990s, steering the airline through Covid-19, the GFC and 9/11, he must be doing something right. At least, that's what shareholders think.

These are the exact conversations happening in boardrooms everywhere, but most executives are terrified to be direct and honest in public. I respect the guy for being so open about his thinking.

At some level, being constrained and pretending is part of being civilized. People admiring "unhingedness", specially coming from people in positions of power, just sound immature, at best.

He doesn't seem unhinged to me. He seems like he has a singular goal: lowest ticket prices, and he's willing to entertain crazy ideas in pursuit of that goal that nobody else would. It's a refreshingly honest take on their corporate strategy. What's wrong with that?

And to state the obvious, if as a traveler you don't share that goal of getting the absolute cheapest ticket at all costs, you shouldn't fly Ryanair. But he's doing a great job here selling to his target demographic.

>He seems like he has a singular goal: lowest ticket prices

That's just a means to an end for his real singular goal: higher profits

I'm not saying there's anything wrong with that, but his real singular goal is not "lowest ticket prices".

While true, that's a bit reductionist. All companies want higher profits. What's interesting is how companies differ from each other while chasing that goal.

I want people in positions of power to be bland and boring, thank you very much.

This whole thing of appealing to popularity amongst a particular subset of the population by being "unorthodox", "refreshingly sincere" and "blunt" is really just a ruse to amass a little bit of unchecked power.

This is Michael O'Leary's brand, tbh. The man would do literally anything to get airtime, which has historically been a really good strategy for Ryanair.

That being said, he's a total asshole. When I worked for them some years back he screamed at a head of function for about 30 minutes because results weren't up to par. It was at that point I decided that the company wouldn't work for me.

For flights under two hours or so, I think I'd rather be forced to stand than forced to sit. Of course, an aisle seat where I can stand or sit at will is the ideal.

Would the seatbelt have to be renamed? I can't imagine how to secure standing passengers against turbulence.

what's more shocking to me is the quality of flying Ryanair vs how outspoken their CEO is.

if you only read his comments, you would think this company is so solid that the CEO has complete free rein. and then you fly Ryanair and you realise it's just shock advertising.

Ryanair gives you what you pay for, nothing more nothing less.

And they aren't afraid of making that clear. I don't think it's shock advertising at all, it's just their brand, product and messaging being in perfect sync.

And there's always something additional to be paid for.

"EVERYONE BE QUIET!! You bought tickets to get to Berlin, right?"

"Well... yes."

"And where is this?"

"Is it.. Berlin?"

"Exactly! Exit your cages to the right. Women, children and goats first please."

> Ryanair gives you what you pay for, nothing more nothing less.

Sometimes less. I've paid for priority boarding on Ryanair and then had the gate agent ignore it.

~everyone has priority boarding on Ryanair - because it's both necessary and sufficient for being allowed carry-on (as opposed to 'personal item' like a laptop bag) baggage.

people "vote" with their money - they rather pay less - they do have the option to pay more and travel with more comforts

can't blame a company for giving people a choice

Ryanair is really no different to any other short haul flight where you are flying economy in Europe. You'll get the same service (i.e. being expected to pay for any extras: a specific seat, baggage above the bare minimum, food & drinks) with British Airways or Lufthansa on short haul flights too.

One of the advantages people often miss about Ryanair is they connect so many airports, that you can often find a direct flight where you would need to change with a more 'premium' airline that follows the hub & spoke model.

Not only that, but sometimes it is only Ryanair / Wizzair / etc. that fly in a reasonable time of day, and not too early / too late. Last time we traveled to Porto, it was the ONLY choice that was arriving / departing at a time that was not midnight or 6 AM. It was even cheaper than the rest. Oh, and it was pretty much the only direct flight from Vienna... So we bought all the priority / luggage / optional extras we could, and the price was on pair with the rest. No delays, no problems, no complaints.

> You'll get the same service (i.e. being expected to pay for any extras: a specific seat, baggage above the bare minimum, food & drinks) with British Airways or Lufthansa on short haul flights too.

hard disagree. Ryanair is literally the worst airline I have ever flown. BA even on short haul is miles ahead.

Not to be a pedant but the Ryanair CEO is Eddie Wilson -- Michael O'Leary now heads up the umbrella group behind Ryanair. It's astonishing to me that the Press Release outlines suggests otherwise.

Ryanair's completely right, even with the tone. Meanwhile the Hungarian state media pretends being outraged and surprised(!) about Ryanair's decision of passing down taxes on consumers. This country's a joke.

The narrative broadcasted by local (state owned) media is still that Orban is protecting people from evil corporations making "extra profit" (that's how they keep calling it, no matter how stupid and meaningless it is) with these nonsense laws and he won't let companies getting away with passing down these new taxes on consumers. Obviously he cannot do anything about it, not even with Hungarian entities.

Sounds exactly like the debate in Sweden in the 80's. They even used a very similar word.

They even went so far as implementing a system where extra profit went into a separate fund that was going to buy shares of the company. An interesting way to take over companies by the state. Thankfully the project was stopped before it was fully implemented.

Some more information. https://en.m.wikipedia.org/wiki/Employee_funds

The 'Extra Profits Tax' is targeted at the passanger, not the airline. They knew that the airlines will pass on the extra cost to the passanger.

The hungarian government knows that they have overspent in the past years and need to raise additional taxes. So they introduced a flat tax of about €10 (€30 for inter-continental flights) per flight. This achieves many things at the same time: -The government gets additional income -Orbán can blame the airlines/multinational companies for cost of living crisis -Fewer people go on holiday abroad, more money spent at home

Hungary is cheap per more developed countries' standards. The €30 upfront might make some rich tourists choose a different country and stay an extra night.

I haven't found anything that makes this "excess profits tax" only affect airlines with excess profits, so it does sound like your typical government naming scheme.

With how cheap discount airlines can be in Europe, this 10 euro tax can easily be a 30-40% raise in ticket price on some flights.

Its funny looking up other sources where the government is seemingly shocked that Ryanair just increased their prices to compensate.

They immediately triggered an investigation with the Economic Competition Authority :) This will be such a shit-show to watch.

FWIW this is a pretty hellish place to work at. It's kind of a bait job for young pilots, you basically do not earn any income there after all work expenses (it's a contractor type of a situation), at the same time the atmosphere is very toxic. But cheap tickets, yeeeeee

Isn't an "excess profits tax" basically similar in spirit to the windfall tax that the (Conservative) UK government just imposed on oil/gas companies for distribution to households dealing with high gas bills after the Russian invasion of Ukraine?

It might have a different flavor coming from Hungary's nationalistic and authoritarian government, but the idea is similar.

FWIW, nobody can define what "excess profit" is exactly.

Let me correct myself, the government can define it, in any way, shape or form they want to.

For example, casinos do not have "excess profits". Companies owned by the family members and friends/relatives of government officials do not have "excess profits".

No, this is not a joke, this is Hungary (an EU member state!) in 2022...

Ryanair is a religious charity non-profit organization in comparison.

It's not just Ryanair, the government is basically milking entire sectors based on the good old socialism constructs that big companies are evil since they are making "extra" profits and people are eating this up not realizing that this will contribute even more to inflation and the ever weakening Forint. Truly concerning.

https://wtsklient.hu/de/2022/06/13/extra-profit-tax-in-hunga...

https://www.pwc.com/hu/hu/sajtoszoba/2022/extraprofit_adoren...

That is some incredibly unprofessional tone for an official press release.

Anyone who's ever had the misfortune of flying with Ryanair can't be too surprised though.

Hate to defend RyanAir, but I prefer unprofessional to corporate doublespeak.

You have a point, but there's not using doublespeak and then there's just being an abrasive asshole. O'Leary is the latter.

Can you qualify that?

https://www.azquotes.com/author/46597-Michael_O_Leary

Here's a few examples, I'm sure you could find more:

https://www.rte.ie/news/2002/0228/23628-ryanair/ https://www.theguardian.com/environment/2005/jun/24/theairli... https://www.belfasttelegraph.co.uk/news/war-in-irish-skies-a...

https://en.wikipedia.org/wiki/Michael_O%27Leary_(businessman...

socially, he's a complete joke.

RyanAir advertisements are often misleading (tickets often end up costing a multiple of the advertised price), so I'm not going to believe anything they say.

> (tickets often end up costing a multiple of the advertised price),

Are you adding a lot of optional extras to your purchase?

I haven't bought a RyanAir ticket in a long time, so details are fuzzy, but as far as I recall they make you pay not just for checked luggage but even for hand luggage (who flies without any bag at all??) and if I remember correctly they even charge extra if you want to sit next to your family members. It's ridiculous.

Ryanair is actually a totally solid airline. They're among the most timely in Europe, if you pay them a few bucks you get an exit row and a meal. Honestly they're among the best of the low-costs (and every domestic flight in Europe counts as low-cost).

They’re really not, unless all you care about is punctuality:

- mediocre app with plenty of bugs

- almost always buses/walks instead of jetbridges

- furthest and uncomfortable gates

- inexperienced and unprofessional cabin crew

- non existent customer service

- hostile web design, dark UX patterns

- baggage fees which seem to go up €10 each year

- inexperienced pilots and bumpy landings

- force you to stand in hot hallways before the plane has even landed (“gate closed”!)

- random policy changes towards baggage

- extremely inflexible terms and conditions. Default is no changes no refunds ever

That’s just what I can remember off the top of my head.

A lot of the above makes them actively hostile towards the elderly and disabled.

Well, that's what you get for those prices right? If you want fancier service many airlines are happy to take your money, usually many times more.

Everyone pretends every flight is €40 return

A fair few people pay €100-400 with all the addons/last minute.

If I’m paying €200+ I have higher expectations than the things I listed

Add false advertising when claiming where you gonna land. Airports often hundred kilometres away from destination.

I guess my response would be: most airline apps are garbage. Any airline risks ending up at a remote stand (just had 3 legs on Lufthansa at Frankfurt on A320s that all ended up at or departed from remote stands).

Yes, the gates are far away and unpleasant, but I mean, some airline would get them no matter what - Ryanair is just passing on the savings of doing so.

Most airlines have huge baggage fees that are basically just as high. Fees on for instance BA are in my experience just straight up higher on top of higher base fares.

And yeah, inflexible T&C are where they make their money.

If you compare a given flight, and add up the fees, you'll pay a lot more to a full-service carrier and get basically the exact same - but less timely.

I guess what I'm saying is if I'm flying 2-3 hours, on the same Recaro slimline domestic seat with 17.x" width and 31" pitch - no matter the airline - I just want to be off the plane, on schedule. And if I can pay $15 for an exit row, I'm pretty chill.

> If you compare a given flight, and add up the fees, you'll pay a lot more to a full-service carrier and get basically the exact same - but less timely.

Not necessarily true. Actually quite often not true

I fly 120-150,000 miles per year, across a mix of low-cost and full-service carriers, in the US, Europe and Asia.

Most European carriers even charge seat selection fees in long-haul business class unless you have status.

> I fly 120-150,000 miles per year, across a mix of low-cost and full-service carriers, in the US, Europe and Asia.

Well done. And I bet you have all your frequent flyer tags dangling from your backpack

No sir! I'm no DYKWIA. However, I do know something about airlines.

Don't use their apps then, learn to navigate the dark patterns on the web, not that bad.

Horrible, they make you walk or they transport you with a bus? OMG, savages.

Just sleep or listen to music on that 1-3hr flight, why deal with the crew?

Sorry, but you made me laugh at bumpy landings :)

You might have been unlucky with specific airports.

I have no stake in defending them, but I expect the same as a crappy train/bus ride for the price which is about the same.

Most timely is partly because they inflate the regular time. a 1:10 ryanair flight would be 0:55 on a normal carrier.

Is that really bad, though? To me that says passengers value predictability, and traditional carriers could be well served by increasing their block time to do so.

10 Euro in fixed tax per ticket aimed to piss off the airlines. Who cares except the Ryan Air CEO swallowing the flame bait.

Ryanair is low-cost. The 10 Euro are a large proportion of a lot of tickets.

It's not "bait" if it's an actual 10 euro tax per ticket.

>This is not an ‘excess profits’ tax, it is just highway robbery by a Govt. that is completely out of touch with reality

Flying, for almost _any_ reason is, in this day and age, completely out of touch with reality.

Dublin to London is 1h 15m by plane. Ryanair costs $24.

A road trip including a ferry takes 8h 23m, and needs driving 600km * 4l/100km = 24l of diesel, which is about $56 just for the fuel.

Then add the value of your free time, which is necessarily higher than your work time, because you have less time left in a week.

What % of flights cross seas, though? I believe you missed the almost in the parent comment.

I expect that the comment above was referring to the negative externalities, not captured by the financial side.

For example, having more free time is probably not adequate compensation for the greenhouse gases emitted (at the societal level at least).

> not captured by the financial side.

The EU has emissions caps. Each year fewer and fewer carbon emissions rights are auctioned out.

https://ec.europa.eu/clima/eu-action/eu-emissions-trading-sy...

Maybe it doesn't yet reflect the externalities on the environment. But it eventually will. The 2030 target is set so that the EU becomes climate-neutral.

https://ec.europa.eu/clima/eu-action/climate-strategies-targ...

Until that time, I'll take the plane whenever I feel like it.

So "excess profits tax" is fine - they say - except when applied to poor airlines? Turns out both Ryanair and Hungarian government are evil and anti-market.

I don't know, Ryanair testing south Africans if they were genuine if they could speak Afrikaans definitely was idiotic. Not all speak that language.

I noticed the Ryanair's title included Excess Profits in quotes but not Idiotic. I wonder what Ryanair's views on this could possibly be.

It's a press release on Ryanair's own site. You don't have to guess whose side they might be on.

Excess profit doesn't have to come from rent seeking. It could just be an accounting anomaly. I wish politicians tried to actually solve real problems instead of trying to blame scapegoats. Oh, and the tone of the article is awful by the way.

A corporation complaining about taxes? My oh my.

Painful to say, but Ryanair is right. Hungarian govt just need more money to buy the voters.

I mean... The joke about socialism was that all special taxes (ie: carbon tax) were just a thinly veiled excuse to scrape the cream off the top.

The whole concept of an "excess profits tax" does away with the thin veil and literally says, "you earned too much money, we're taking some of it".

Lufthansa should've killed Ryanair when it had a chance, too late now. Terrible airliner

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