Ryanair has issued a stark ultimatum to the Austrian government, demanding the immediate abolition of the country’s €12 aviation tax by 1 May or risk a continued exodus of airlines, routes and passengers to lower-cost neighbours.
Europe’s largest carrier by passenger numbers warned on Tuesday that Vienna and Austria’s regional airports are haemorrhaging capacity, with Wizz Air, easyJet and Level having already scaled back or withdrawn operations this year. Austrian Airlines and Ryanair itself have also trimmed schedules and axed routes, redeploying aircraft to Slovakia, Italy and Albania, where operating costs are markedly lower.
The airline argues that Austria has become commercially unviable for growth-focused carriers at a time when rival jurisdictions are actively courting business. Slovakia, Albania and parts of Italy have scrapped aviation levies, reduced air traffic control (ATC) charges and rolled out growth incentive schemes offering discounted airport fees to airlines that add capacity. Even Sweden, long associated with the flight-shaming movement, has abolished its domestic aviation tax.
Ryanair says it is ready to unlock a $1 billion (£790 million) investment programme that would see Austrian passenger numbers climb by 70 per cent to 12 million over five years. The plan, first floated last year, envisages basing up to ten new Boeing 737 aircraft at Vienna, together with expanded services from regional airports. However, the Dublin-based carrier has made the offer conditional on three demands: the scrapping of the €12 tax, a 50 per cent cut in ATC charges to match Slovak levels, and the reinstatement of Vienna Airport’s growth incentive scheme, discontinued several years ago.
Chief executive Michael O’Leary used characteristically blunt language to press the point. “Austria has become totally uncompetitive, and is losing aircraft, routes and traffic to lower cost alternatives like Slovakia, Albania and regional Italy,” he said. “Meanwhile, Austria has the highest aviation taxes, the highest ATC fees, and Vienna Airport has abandoned its growth incentive schemes.”
Mr O’Leary directed his fire at Chancellor Christian Stocker and Transport Minister Peter Hanke, branding them “Sleepy Stocker” and “Hopeless Hanke” and accusing the coalition of tinkering with reform of the levy when outright abolition is required. “We need leadership and we need action,” he said.
Vienna Airport’s former growth-incentive model, which rewarded carriers adding new routes with lower charges, was credited with a significant uplift in traffic when it was introduced roughly eight years ago. Its withdrawal, coupled with the 2011 aviation tax, doubled to €12 per short-haul departure in 2024, has been cited by low-cost operators as a primary reason for scaling back.
For the corporate travel market, the implications are material. Fewer routes from Vienna mean reduced point-to-point connectivity for Austrian businesses and higher fares on remaining services, particularly on leisure-leaning leisure-leaning routes where competition has thinned. Travel managers with programmes centred on Vienna may find their duty-of-care and cost-control options narrowing as carriers redeploy metal to Bratislava, Tirana and northern Italian hubs.
The Austrian government has so far indicated it is reviewing rather than repealing the levy. Ministers have previously defended the tax on both fiscal and environmental grounds. A spokesperson for the transport ministry was not immediately available for comment.
Whether Chancellor Stocker will heed Ryanair’s 1 May deadline remains doubtful. What is clearer is that, without a material shift in Austria’s cost base, Vienna’s decline relative to its central European neighbours is unlikely to reverse in the short term, a trend business travellers will feel at the booking screen long before it registers in the political arithmetic.