MADRID – Spain’s consumer rights ministry has fined budget airlines including Ryanair (NASDAQ: RYAAY) and Vueling a combined 179 million euros ($187 million) for practices such as charging for larger cabin bags, it said on Friday.
Consumer groups said in May that the ministry had fined the airlines 150 million euros. The ministry did not confirm the fines at the time, but on Friday gave the details for the first time while saying it had rejected appeals from the airlines.
In a statement, the ministry said that the airlines, which also included easyJet, Norwegian, and Volotea, violated customers’ rights when charging for larger carry-on bags, picking seats or boarding pass print-outs and not allowing cash payments at check-in desks or to buy items on board.
Ryanair (NASDAQ: RYAAY) was fined 108 million euros, while IAG’s low-cost unit Vueling was fined 39 million euros, easyJet 29 million, Norwegian 1.6 million, and Volotea 1.2 million. The amount announced in May was 150 million euros and not broken down by airline.
The fines are a challenge to budget airlines’ business model, which hinges on very low ticket prices while charging for extras like larger hand luggage that were traditionally included in the price.
Irish carrier Ryanair, Europe’s largest in terms of passengers, said it would take its appeal to Spain’s courts.
“These illegal and baseless fines, which have been invented by Spain’s Consumer Affairs Ministry for political reasons, are clearly in breach of EU law,” said its CEO, Michael O’Leary.
He added that different commercial practices were crucial to cost savings that are passed on to customers in the form of low prices.
Javier Gandara, the head of the industry group ALA, said all the airlines would appeal against the fine for cabin baggage charges, though not all would challenge other measures such as forcing airlines to accept cash when selling items on board.
ALA called the ministry’s decision “nonsense” and said it violated free market and EU rules.
It added the move would force as many as 50 million passengers traveling with just a small bag to pay for services they do not need.
The decision would hurt the Spanish travel industry, as no other EU country prevents extra charges for large carry-on bags, Gandara said.
However, countries like Italy have limited some budget airline practices. In August, Ryanair (NASDAQ: RYAAY) lost an appeal against a ban on extra fees for seat reservations next to children under 12 or people with disabilities.
($1 = 0.9541 euros)
