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EU: Spain's airline fines for cabin baggage fees are illegal

The European Commission said on Wednesday that the fines levied by Spain against Ryanair, an Irish budget airline and other airlines charging additional fees for cabin bags were in violation of regulations.

Last year, the Spanish Consumer Rights Ministry fined Ryanair and easyJet, Norwegian Airlines, IAG’s low-cost subsidiary Vueling as well as Volotea, a total of 179 million Euros ($208 million). This was for practices like charging for cabin baggage.

These fines challenge the business model of budget airlines, which relies on low ticket costs while charging extras such as larger hand luggage that was traditionally included in price.

The Commission, however, said that the fines violated EU law on air service which allows airlines to "set their own prices".

The letter said, "The Commission will send a formal notice to Spain. Spain has two months now to respond to the deficiencies and correct them."

The letter initiates a "violation procedure" that could lead to the EU Court of Justice hearing the case.

Pablo Bustinduy (Spanish Consumer Rights Minister) accused the Commission siding with airlines and against consumers.

He told reporters that it was regrettable that "the European Commission decided to openly position themselves as the defense attorney for these handful of large multi-nationals who are profiting on the backs of consumers rights."

"We will take our case to the EU Tribunal and defend it with all the rigor we can muster."

Michael O'Leary, Chief Executive Officer of Ryanair, told reporters in Madrid that in reality the Commission had sided with consumers who benefited from more price options.

In June, a Spanish court ordered that the fines be temporarily suspended while the case was investigated.

The court's injunction allowed the airlines to continue their pricing policy, until a final ruling was made.

(source: Reuters)