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The boss of easyJet has denounced fines handed out to the airline and other budget carriers for charging passengers for hand luggage and seat reservations as “illegal” and warned the decision will make it more expensive to fly.
EasyJet was given a penalty of €29m (£24.2m) by Spain’s Consumer Rights Ministry earlier this month, along with Ryanair, which received the largest fine of €108m, and other airlines including Vueling, Norwegian and Volotea.
The outgoing easyJet chief executive, Johan Lundgren, who is stepping down at the end of the year after seven years at the helm, described the penalty as “anti-consumer” and insisted offering passengers paid-for extras gave them choice.
“We’re offering people the choices to do and get what they pay for. One-third of our customers do not choose any ancillaries whatsoever,” Lundgren told the BBC’s Radio 4 Today programme.
He added that the imposition of the fines would “increase the underlying fare. It’s going to make it more expensive to fly and travel for people who don’t want to have this type of product.”
It came as easyJet reported an operating profit of £597m for the year ending 30 September, 25% higher than a year earlier, although this was below analysts’ expectations.
The last set of results of Lundgren’s tenure showed that easyJet’s ancillary revenue – which includes baggage fees, seat reservations and onboard food costs – rose compared with a year earlier.
Ancillary revenue increased by 4% on the previous year to £24.45 a seat, as the company said its ancillary products led to “enhanced revenue generation through price optimisation”.
Lundgren said the increase in ancillary revenue was “driven by demand”, adding that customers would not buy the extras offered if they did not believe it was value for money.
“If you look at the overall fare, the fare increase this summer is £1,” Lundgren said.
Continuing demand for foreign travel helped easyJet to carry more passengers during the year, and it flew 89.7 million passengers in the 12 months to 30 September, almost 7 million more than a year earlier when it flew 82.8 million.
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The airline also experienced more demand for its package holidays, and expects to grow its number of holiday customers by about 25% in the coming year.
Lundgren will hand over the reins to the carrier’s current chief financial officer, Kenton Jarvis, on 1 January 2025, although he will stay with the business until May.
The airline said it was expecting to pay shareholders a dividend of 12.1p a share, up from 4.5p in 2023, which will cost it £92m, providing it is approved by investors at its annual shareholder meeting.
