Ryanair promises $1bn Italian investment after tax U-turn

Ryanair has said it is to spend $1 billion (€887 million ) growing its market share in Italy following a decision by the country's government to reverse a €2.50 municipal tax increase that was due to commence in September.

The airline said it intended to allocate 10 aircraft to the Italian market, open 44 new routes and grow traffic locally by 10 per cent to 35 million passengers next year.

Ryanair claimed the investment would lead to the creation of 2,250 jobs at Italian airports in 2017.

Tax U-turn

The airline’s chief executive, Michael O’Leary, thanked the Italian government for its U-turn on the proposed tax increase.

“All of this growth would have been lost to other EU countries if the municipal tax increase had not been reversed and the airport guidelines had not been redrafted to comply with EU rules,” he said.

Ryanair said it had also agreed a deal with Pescara airport in the Abruzzo region, which will reverse the previously announced closure of the base at the end of October.

“We remain in negotiations with Alghero airport and are hopeful of concluding a similar agreement with them when they conclude their current privatisation project in early September, which may allow the Alghero base to reopen in late November,” Mr O’Leary said.