Spain’s Ministry of Consumer Rights on Friday slapped a $179 million euro ($186 million) fine on five low-budget airlines for “abusive practices” including charging additional cabin luggage fees.
Ryanair was struck with the lion’s share of the penalty, receiving a 107.78-million-euro fine. Spanish low-cost airline Vueling was ordered to pay 39.2 million euros and EasyJet was fined 29 million euros. Scandinavia’s second-largest airline Norwegian and Spanish airline Volotea each received penalties in excess of 1 million euros.
The five airlines should discontinue their practice of requiring additional payment for cabin luggage and reserving a seat near a dependent traveler, the ministry said. The airlines were also criticized for “disproportionate and abusive” charges to print tickets, allegedly omitting or failing to clarify pricing information on their websites, and failing to allow cash payments at Spanish airports.
Spain’s Association of Airlines (ALA) said it will appeal the fine for cabin luggage fees in court, dubbing the penalty as “manifestly illegal” and against European norms, according to a CNBC translation of a statement from the industry group.
“If implemented, the resolution of the Ministry of Consumer Rights would imply irreparable damage to [the] passenger, an attempt against their freedom to tailor their voyage depending on their needs, and an obligation to pay for services that they might not need,” ALA President Javier Gandara said, according to a CNBC translation.
CNBC has reached out to the airlines for comment.
Ryanair said it would “immediately appeal Spain’s illegal and baseless baggage fines,” with CEO Michael O’Leary saying the sanctions, which “have been invented by Spain’s Consumer Affairs Ministry for political reasons, are clearly in breach of EU law.”
“The success of Ryanair and other low fare airlines in Spain and across Europe in recent years is entirely due to Europe’s Open Skies regime and the freedom of airlines to set prices and policies without interference from national Governments which is what today’s illegal Spanish fines are,” he noted.
Norwegian, likewise, said it will follow up with Spanish and EU authorities to dispute the charge and noted that its baggage policy reflects its commitment to “providing safe, affordable travel.”
“We completely disagree with the decision of the Spanish Consumer Ministry and find the proposed sanctions outrageous,” an EasyJet statement said, stressing it considers its cabin luggage policy to be aligned with all applicable laws. “We will be formally appealing this through the courts and will vigorously defend our position.”
After a long recovery following Covid-19 travel disruptions, budget airlines have been contending with a range of issues including higher fuel prices, global decarbonization and geopolitical uncertainty. Hold-ups in aircraft deliveries from American manufacturer Boeing — which incurred more than $5 billion in losses from a two-month-long machinist strike this autumn — have also impacted traffic growth rates, with Ryanair on Nov. 4 downgrading its fiscal-year 2026 target to 210 million passengers, from a previous projection near 215 million on account of the delays.
Last month, a GlobalData report projected that the low-cost carrier market will grow at a compound annual growth rate of more than 10% over 2023-2028, citing affordability as a key priority for such airlines, which implement cost-cutting measures such as extra charges for baggage and in-flight meals.
In its June forecasts, the International Air Transport Association noted that profitability across carriers, including non-budget airlines, are slated to reach a record-high revenue of $996 billion in 2024, up 9.7% year-on-year.
Credit: CNBC
Source: https://www.cnbc.com/2024/11/22/spain-fines-ryanair-easyjet-and-other-budget-airlines-for-abusive-cabin-luggage-fees.html
