Hungary slapped a fine on Irish airline Ryanair on Monday for passing on to customers the cost of a special tax that Budapest has imposed on some companies in response to surging inflation.

The Irish budget airline was fined 300 million forints (€766,000) due to "a violation of the law as the airline misled consumers through unfair business practices," Justice Minister Judit Varga wrote on Facebook.

Varga said she wanted to "protect the Hungarian people" against the rising cost of living amid high inflation and the war in Ukraine.

Prime Minister Viktor Orban's government has imposed the windfall tax on certain companies to finance his policy of placing a ceiling on energy and food prices.

The tax has added between €10 and €25 per ticket since July 1. Ryanair has passed the cost on to its customers.

Ryanair said in a statement that it had not received official notification from Hungarian authorities but that it would immediately appeal "any baseless fine".

It said that European Union rules allow airlines to set ticket prices without any interference from national governments and would appeal to EU courts if necessary.

EU rules allow airlines to set ticket prices without any interference from national governments and [it] would appeal to EU courts if necessary- Ryanair statement

Ryanair chief executive Michael O'Leary has derided the tax as "idiotic" and "highway robbery", saying it will lead to a "dramatic" fall in air traffic in Hungary.