EasyJet It said on Tuesday it made a record 3.59 billion pounds ($4.5 billion) from charging passengers for flight extras such as extra baggage throughout the year through October, as the budget airline's chief executive criticized a recent Spanish fine over the practice.
EasyJet Group, which includes the airline and holiday provider, reported on Tuesday that ancillary revenue – which can include extra baggage allowance, seat selection, priority boarding and in-flight meals – rose 22% year-on-year.
Many airlines have dropped what they included in their fares in recent years, instead relying on making more individual add-ons, as competition intensifies to offer very low-cost basic fares.
Last week, Spain's Ministry of Consumer Rights imposed sanctions on five low-cost airlines – including Norwegian's EasyJet, Spain's Vueling and Ireland's Ryanair – for “abusive practices such as charging extra fees for hand luggage or reserving adjacent seats for accompanying dependents.” EasyJet was fined €29 million.
“We completely disagree with that, and we believe it is completely against European law and European law will override that,” easyJet CEO Johan Lundgren told CNBC's “Squawk Box Europe” on Tuesday.
“It's a hugely unfair notion to not be able to offer products and services targeted at people who want to use them. A third of our customers choose not to buy any accessories at all, so why should they care about the cost for something someone else is willing to pay?”
“It's good for customers and lowers prices,” he added.
The Spanish Airlines Association (ALA), Ryanair, Norwegian and easyJet last week criticized the fines and said they would contest them.
Spain's Ministry of Consumer Rights also charged airlines with “disproportionate and abusive” charges for printing tickets, deleting or failing to make pricing information clear on their websites – controversial practices that have become increasingly common in recent years.
A scale of hand luggage dimensions stands next to the Easyjet Plc check-in area at Stansted Airport, operated by Manchester Airports Group (MAG), in London, UK, on Wednesday, August 7, 2013.
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EasyJet on Tuesday reported full-year pre-tax profits of £610m, in line with analyst expectations and up 34% year-on-year.
Lundgren told CNBC that a record summer performance and lower losses last winter fueled performance, supported by “quietly strong” demand.
“Consumers across Europe are prioritizing travel and holidays,” he said.
EasyJet shares rose 2.5% at 9:13 a.m. in London.
The results come after rival Ryanair reported an 18% drop in half-year profits as passenger numbers rose but prices fell. The airline said consumer spending pressures, a decline in online travel agency bookings, and frequent delivery delays by the US aircraft manufacturer Boeing All of this weighs heavily on performance.
Ryanair is a major customer of Boeing's troubled B737-Max aircraft, which has suffered long delivery delays – forcing many airlines to review their growth plans.
Both companies, which focus on short-haul flights around Europe, have returned to profitability in recent years after being hit by a barrage of headwinds throughout the Covid-19 pandemic.
