Ryanair Holdings PLC (LON:RYA) was flying lower this morning after the budget airline said it will take a €50mln hit from a new baggage policy that will see it cut the fee for putting luggage in the hold.
From 1 November, the Irish carrier will drop the check-in bag charge to £25 from £35 and increase the weight allowance by 5kg to 20kg.
£5 extra to take a wheelie bag on board
Customers will also have to fork out an extra £5 for priority boarding if they want to take a wheelie bag on the plane with them. The additional fiver will also allow them to take on a second, smaller bag as well.
Non-priority boarders, on the other hand, will only be able to take one small carry-on bag; anything deemed too big or with wheels will be taken at the gate and put in the hold free of charge.
Ryanair – which filled 97% of its seats in August – said it was bringing in the new measures to try and reduce boarding and flight delays caused by a shortage of overhead cabin space.
It added that the cost was worthwhile and hoped the cheaper check-in option would encourage more people to put their luggage in the hold and make up for some of the lost revenue that way.
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'We don't have anough space to accomodate 360 carry-on bags'
“These bag policy changes will cost Ryanair more than €50m a year in reduced checked bag fees,” said chief marketing officer Kenny Jacobs.
“However, we believe offering bigger bags at reduced fees will encourage more customers to consider checking in a bag, which will reduce the high volume of customers we have with two carry-on bags at the boarding gates, which is causing flight delays due to large numbers of gate bag and cabin bag offloads,” Jacobs said.
“We hope that by restricting non-priority customers to one small carry-on bag – their wheelie bag must be placed in the hold, free of charge at the boarding gate – this will speed up the boarding of flights and eliminate flight delays being caused by not having sufficient overhead cabin space on busy flights to accommodate over 360 carry-on bags.”
Shares in Ryanair slipped 0.8% to €18.02. Fellow low-cost airline Easyjet PLC (LON:EZJ) was also in the red, down 0.7% to £11.47, despite seeing load factor and passenger numbers rise in August.