ROME (Reuters) - A group of airlines operating in Italy on Monday criticised government plans to curb ticket prices at the height of the summer season, saying they could breach European Union free market rules.
Prime Minister Giorgia Meloni's cabinet was set to approve later on Monday a decree law covering a range of subjects including support for strategic industries, taxi licences, a blue crab invasion as well as airline prices.
The draft decree, still subject to change, forbids companies from raising fares for Sicily or Sardinia beyond a level that is "200% higher" than the average price for such routes. Ticket prices to Italy's two main islands have soared in recent weeks.
The Italian Board of Airlines Representatives (IBAR) and Assaereo trade associations complained in a joint statement that the government never discussed the issue with them, saying it could have led to "less punitive solutions."
They also said the price controls "appear to be in conflict with the applicable sector regulations," which generally allow carriers operating in the EU "to choose the routes on which to operate and to freely set passenger and cargo fares."
Sicily and Sardinia, have poor connections to the mainland, leaving both residents and tourists little choice but to use air transport to reach them, even when prices are sky-high during peak seasons.
Companies including Lufthansa, EasyJet, American Airlines (NASDAQ:AAL) and Delta are members of the IBAR, the association's website shows.
The groups called on the government to reconsider its decision, warning that "any attempt to restrict the freedoms of the sector and the competition that characterises it" could negatively impact supply and ticket prices, as well as employment levels in the airline sector and related industries.
Measures in a decree law take effective immediately, but parliament has to ratify them within two months, otherwise they lapse. Parliament can also amend the contents of a decree during the ratification procedure.