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Ryanair flies lower as it takes €50mln hit from new baggage policies

Only priority boarding customers will be able to take two bags on board from 1 November and the airline has also lowered the fee from checking luggage into the hold

people at airport gate
12.7mln passengers flew with Ryanair in August, with most of those taking two bags on board

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.

READ: Ryanair boss warns of cancelled flights on Brexit deal delay as airline reports record traffic

'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.

READ: JP Morgan says Ryanair is undervalued compared to peers as it lifts price target

Quick facts: Ryanair Holdings plc

Price: 10.32 EUR

Market: LSE
Market Cap: €11.26 billion

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