EasyJet announced record revenue on Wednesday for the fiscal year ending in October, driven by substantial income from additional passenger charges for services such as extra baggage.
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However, the airline’s CEO, Johan Lundgren, criticized a recent fine imposed by Spain over these practices.
The EasyJet group, which includes its airline and holiday package services, revealed that ancillary revenue—covering extra baggage, seat selection, priority boarding, in-flight meals, and its holiday offerings—rose by 22% year-on-year to £3.59 billion ($4.5 billion).
Of this, the airline segment contributed £2.46 billion, marking a 13% increase compared to the previous year.
In recent years, many airlines have reduced the services included in standard flight fares, instead capitalizing on selling additional features as the competition to provide ultra-low base fares intensifies.
Last week, Spain's Ministry of Consumer Rights penalized five budget airlines—EasyJet, Ryanair, Vueling, Norwegian, and others—for what it deemed “abusive practices.”
These practices included charging passengers for basic services such as carrying hand luggage or reserving adjacent seats for individuals traveling with dependents. EasyJet alone was fined €29 million for these policies.
“We strongly disagree with this decision; it is entirely inconsistent with European law, which will ultimately prevail,” Lundgren said during an interview with CNBC’s Squawk Box Europe on Wednesday. He defended EasyJet’s approach, arguing that offering customizable products and services benefits passengers.
“A third of our customers don’t purchase any ancillary services, so why should they worry about costs associated with something they don’t use?” he added, emphasizing that such offerings help keep overall ticket prices low.
EasyJet, along with Ryanair, Norwegian, and Spain’s Association of Airlines (ALA), have all expressed their opposition to the fines and announced plans to challenge them.
Spain’s Ministry of Consumer Rights also accused these airlines of imposing “disproportionate and abusive” fees for ticket printing and failing to clearly present pricing information online—controversial practices that have grown more widespread in the industry.
The airline also reported a full-year pre-tax profit of £610 million, aligning with analyst predictions and reflecting a 34% year-on-year increase.
According to Lundgren, this strong performance was bolstered by a record-breaking summer season and lower losses during the previous winter, driven by what he described as “quite strong” demand “Consumers across Europe are prioritizing travel and holidays,” he said. Despite the positive results, EasyJet shares closed 0.4% lower on Wednesday.
These results come in contrast to competitor Ryanair, which recently reported an 18% decline in half-year profits. Despite rising passenger numbers, Ryanair faced challenges such as lower fares, reduced online travel agency bookings, and delivery delays from U.S. aircraft manufacturer Boeing.
The delays, particularly with Boeing’s B737-Max aircraft, have disrupted growth plans for several airlines, including Ryanair.
Both EasyJet and Ryanair, focused on short-haul flights across Europe, have rebounded to profitability after enduring significant setbacks during the Covid-19 pandemic.
This marks a significant recovery for the industry following years of financial turbulence.
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