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Ryanair's new hand luggage charges challenged by Italy's competition watchdog

Italian competition authority Antitrust said hand luggage is an "essential” item for travellers and should be included in the plane ticket price

Ryanair
Ryanair passengers are only allowed to take a small personal bag onto the plane

Ryanair Holdings PLC’s (LON:RYA) decision to start charging passengers for cabin luggage is being challenged by Italy’s competition watchdog.

The watchdog, Antitrust, has opened an inquiry into Ryanair’s new policy, saying hand luggage is an "essential” item for travellers and should be included in the plane ticket price.

From November, Ryanair will only allow non-priority passengers to take a small personal bag onto the plane if it fits under the seat in front. 

READ: Ryanair tightens rules on cabin baggage in bid to reduce delays

Customers will be charged up to £10 if they want to take a 10kg bag into the cabin. If they fail to pay ahead of time they will have to pay up to £25 at the airport.

Priority customers can still bring two free carry-on bags, including a 10kg bag.

New charges distort final price, says Antitrust 

Antitrust said the new charges could amount to unfair commercial practice because it distorts the final price of the ticket and does not allow a true comparison with other airlines’ prices.

The Italian competition authority intervened after receiving complaints from consumer associations.

"If its unfair commercial practice on hand luggage is confirmed, Ryanair... should reimburse all its customers who suffer unfair additional costs," association Codacons said, vowing to take the issue to court if necessary.

Ryanair co-operating with Italian watchdog 

Ryanair's chief marketing officer Kenny Jacobs said in a statement on Friday: "We look forward to cooperating with this Italian inquiry."

He added: "All Ryanair customers are free to bring one piece of carry-on bag onboard. But no airline customer has a right to unlimited carry-on bags. For safety reasons, most short-haul aircraft cannot accommodate two carry-on bags for each customer."

In August Ryanair said the new policy was not aimed at making money but aimed at improving punctuality and speeding up boarding.  

But according to research by US travel consultancy IdeaWorks, the airline has made £1.7bn from charges for add-ons like checked baggage and selected seats in the past year – meaning a third of its profits came from so-called “ancillary revenue”.

Ryanair's reputation grounded

The probe serves as another blow to Ryanair after suffering a bout of bad publicity from a raft of strikes by pilots and cabin crew across Europe.

Concerns about the industrial action saw many shareholders vote against the re-election of Ryanair’s chairman David Bonderman at the annual general meeting on Thursday.

READ: Ryanair chairman re-elected at AGM by narrower margin amid concerns about strikes

Bonderman was re-elected with 70.5% of votes but that marked a significant drop from the 89.1% of votes he received last year.

Aberdeen Standard Investments (ASI), which owns a 0.9% stake in the airline, said it wanted to see Bonderman and senior independent director Kyran Mclaughlin replaced by this time next year or it would vote against their re-election.

"The length of time both have been on the board suggests a lack of focus on board succession planning," ASI said.

 

Quick facts: Ryanair Holdings plc

Price: 9.066 EUR

LSE:RYA
Market: LSE
Market Cap: €9.88 billion
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