Ryanair (FR, Dublin Int'l) has announced it will scale back its Italian operations as a result of a 40% hike in passenger departure taxes which came into effect on January 1 of this year.

In a statement, the Irish LCC said from October onwards it would close bases in Alghero, Sardinia and Pescara while pulling out of Crotone completely. Sixteen routes will also be cut while capacity at regional airports will now be transferred to Ryanair's Rome and Milan bases. Aircraft that had been based in the three cities will be repositioned to Spain, Greece and Portugal. In all, over 600 jobs will be affected, it said.

"After a record year for tourism in Europe and another strong potential year ahead, the Italian government has decided to shoot itself in the foot by increasing passenger taxes by around 40% to pay for unemployment benefits for former Alitalia (AZA, Rome Fiumicino) pilots," David O’Brien, Ryanair's Chief Commercial Officer, said.

"Italy has now become an uncompetitive and unattractive destination for airlines and tourists alike and as more clients avoid the Middle East and North Africa for their Mediterranean holidays, Italy has handed Spain, Portugal and Greece a golden opportunity to grow as they are far more cost-effective destinations."

"Ryanair appeals to the government to eliminate this increase and asks for urgent dialogue to save the tourism sector, the air services sector, and Italian jobs."

Ryanair is in a similar situation in Norway where the government there is set to increase passenger taxes from April 1. The LCC has warned that should the tax be implemented, it may close its Oslo Rygge base from November onwards. According to a report by Norway's Dagbladet, Ryanair has also handed back the slots it was granted at Oslo Gardermoen for the upcoming summer season.