Ryanair’s €256M Fine May Be Tip of The Iceberg
Italian Competition Authority Discovered a Possible Breach of Fiduciary Duty by the CEO
Ryanair has been battling with online travel agencies (“OTAs”) over the past few years. The fiercest battle has been between Ryanair and the OTA eDreams ODIGEO (“eDreams’). There have been significant developments over the past few months. The first development was unearthed on November 18, 2025, when eDreams released its second quarter earnings for its 2026 Fiscal Year. In the earnings release, eDreams, among other things, reduced their growth estimates. eDreams’ management attributed the estimate revision to Ryanair being more successful in blocking OTAs, and eDreams, from accessing Ryanair flights despite court orders giving OTAs rights to Ryanair’s content (1). The second development was on December 23, 2025. That day, it was announced that the Italian Competition Authority (“ICA” or the “Italian Authority”) imposed a €256 million fine on Ryanair for abuse of dominant position. The Authority claimed that Ryanair “put in place an elaborate strategy affecting the ability of online and traditional travel agencies to purchase Ryanair flights on Ryanair.com. In particular, the company’s strategy blocked, hindered or made such purchases more difficult and/or economically or technically burdensome when combined with flights operated by other carriers and/or other tourism and insurance services” (2). These findings alone are interesting and indicate that the regulators are on the side of consumers, OTAs, and eDreams, while Ryanair is not. However, while the ICA is focused on Ryanair’s anti-competitive practices, in its investigation, it seemed to unearth evidence of other significant issues related to the company’s execution of this strategy, specifically questionable communications to the Ryanair board and shareholders by Ryanair’s CEO and board member Michael O’Leary. These communications may even be deemed to be a breach of fiduciary duty by a director. While I have written extensively on eDreams in the past, in this article, I’ll bring them up only as it is relevant to this issue. Instead of diving in on eDreams, I would like to focus on the Italian Authority’s ruling, their findings, and potential implications for Ryanair.
Blocking OTAs – The Enhanced Shield
During 2023, several OTAs complained that Ryanair escalated its practices of blocking purchases on Ryanair.com website from OTAs using technical measures. Later, via internal documents acquired by the Italian Authority, it was discovered that Ryanair developed a system to block OTA transactions called the Shield System (the “Shield”) (3, 4). Furthermore, the Italian Authority gathered internal documents that seem to show Ryanair maintained monitoring reports of OTA activity. When OTAs found and exploited vulnerabilities, Ryanair worked to close them. The multi-phase scheme seemed to be designed to create friction for end customers when using OTAs and damage the credibility of the OTAs.
Pirate OTA Smear Campaign and Partnership Agreements
In conjunction with the Shield blocking efforts, the Italian Authorities uncovered a massive smear campaign where OTAs were labeled “Pirate of the Month”. In addition to the smear campaign, Ryanair exerted pressure on the OTAs to sign up for partnership agreements. Uncovered documents show that Ryanair targeted 5 priority OTA: Expedia, eSky, Trip.com, Lastminute.com, and eDreams. A quote from an internal document stated, “If we could secure agreements with all 5, we would be in a strong position with all the major OTAs in our key market”.
Brick-and-mortar travel agencies and OTAs make money by adding value to consumers. They could add value via hacker tickets for example. That is when you fly on one airline outbound and a different one on return. This could be done out of convenience (better schedule) or economics (better combined prices) or both. They also add value by creating dynamic packages, so combining flights, insurance, hotels, car rental, excursions, and other travel items. Additionally, by aggregating demand, travel agents and OTAs are able to negotiate better rates with providers such as airlines and hotels. eDreams takes it a step further and shares most of the aggregation savings with its Prime subscription customers. The first money spent in travel is typically spent on flights. Ryanair homed in on this to exert leverage on OTAs by blocking OTAs from booking via Ryanair.com, while running a public relations campaign and branding the OTAs as pirates. This is reminiscent of a mafia protection racket: Nice OTA you have there, it would be a shame if all of your airline bookings disappeared. If you want to keep them, sign this partnership agreement. If they only had Luca Brasi to deliver the message.
It is worth noting that before the implementation of the Shield tactics, OTA sales typically exceeded 20% to 25% of Ryanair sales and that the shield tactics materially dropped OTA sales (3, section 427).
How Eliminating OTAs, or Sidelining them via Partnership Agreements, Benefits Ryanair
So, if implementing the Shield tactics cost Ryanair money, at least in the short term, why would it do it? Let’s go back to the value of travel agents. They create packages with several travel services, and to do it they need the flight. They also help to create flights packages that are more convenient and price efficient for customers (hacker tickets). The partnership agreements do many things, but the biggest is prohibiting partner OTAs from offering travel packages or services that compete with Ryanair’s own offerings. So, no creative bundling. An OTA could not offer a Ryanair flight and pair it with a hotel offering that was better than one offered on Ryanair’s own website. Hacker tickets were eliminated. It also eliminated OTAs from offering Ryanair flights cheaper than Ryanair did. Essentially, the OTAs just become a reseller of Ryanair and not an agent offering the best prices and packages to travelers. This is one of the main contentions of the Italian Authority in their claim that Ryanair abused their dominant position and explains why Ryanair would go through the initial pain to sideline OTAs.
Ryanair wants to not only sell tickets but also wants to control the customer. Controlling the customer allows them to sell the ticket, the insurance, ancillaries, other travel services such as hotels and rental cars, and other up-selling opportunities. Just selling a ticket via an OTA means Ryanair loses on fees and commissions for other travel services. Ryanair controlling the customer allows them an opportunity to up-sell all travel services, but this comes at the cost of consumer choice, as it builds a walled garden around the travel market.
It is understandable why Ryanair was tempted to create this walled garden and go after OTAs. That said, given Ryanair’s dominant position in flights, it was bound to attract the displeasure of regulators. But, the point of the article is not the validity of the Italian Authority’s regulatory actions against Ryanair, it is what the Italian Authority seemed to uncover in their investigation that they are not really focused on – potential breaches of fiduciary duties by the CEO.
Potential Breach of Fiduciary Duty
In Ireland, under the Companies Act 2014 specifically codified in Section 228 (5), directors (note the CEO holds a directorship) owe fiduciary duties to the company. The duties specifically include the obligation to act honestly and responsibly in relation to the conduct of the company’s affairs. Lying to the board would, in my view, constitute a breach of this duty, and possibly related duties, like acting in good faith or exercising reasonable skill and diligence. A memo unearthed by the Italian Authority seems to show the CEO blaming lower sales on a boycott by OTAs and stringent EU payment service rules instead of the Shield tactics they were implementing.
In addition to blaming OTAs on the revenue decline in communications to the board, management and the CEO did the same when communicating with shareholders. Interestingly, it does not seem to have dawned on management to correct their shareholder communication. In their January 26, 26 earnings call, they continued to reference issues stemming from the “OTA Boycott”.
Conclusion
In its recent earnings report, Ryanair took an €85M charge for the Italian fine. I am not an expert on European regulations regarding competition and abuse of a dominant position, but it seems like the Italian Authority built a strong case and, separately, that eDreams may prevail in their battle with Ryanair. Again, the point of the article is not to evaluate the claims of the Italian Authority, but to point out that their investigation may have uncovered other risks to Ryanair. Lying to the board of directors and to the shareholders by blaming an OTA boycott on the company’s reduced sales instead of the self-implemented Shield tactics seems to open management up to regulatory actions for breach of fiduciary duty and possibly fraud (potentially lying to shareholders about financials). This seems like a massive self-inflected wound. I do believe Ryanair abused their dominant position and violated regulations on competition. However, even if they acted appropriately, why not be open with the board and shareholders regarding the actions you are taking and the short and long-term implications? Why open yourself up to new and possibly serious regulatory and legal actions? The CEO getting in hot water with regulators could make the company vulnerable to a takeover, which is interesting given the recent X spat between Michael O’Leary and Elon Musk, and Musk’s threats to take over Ryanair and installing a CEO named Ryan.
Exhibits
eDreams’ Slide on Ryanair Second Quarter Earnings FY26
https://en.agcm.it/dotcmsdoc/pressrelease/A568_chius_omi%20x%20pubb..pdf
Note, the English exhibits from the Italian Authority referenced in Exhibit 3 above, was translated from Italian to English via AI and may contain translation errors.
https://www.irishstatutebook.ie/eli/2014/act/38/section/228/enacted/en/html#sec228
Disclaimer: Not and offer to buy or sell any security. For entertainment and informational purposes only. Do your own due diligence.