Carry-on luggage: The Vueling case and its effects
Recently, European Union lawmakers voted in favor of adopting a proposal that will allow air travelers to carry, free of charge, one personal item and one piece of hand luggage weighing up to seven kilos.
This proposal follows a decision in the Vueling case. The Spanish low-cost airline allowed passengers to carry on, at no additional cost, a small bag—specifically, one small enough to fit under the seat. By contrast, passengers who wanted to carry a suitcase to be placed in the overhead compartments had to pay an extra fee.
In principle, airlines are free to set prices as they wish. This is the principle of autonomy enshrined in Article 22 of Regulation 1008/2008. However, the Court of Justice of the European Union ruled that charging for hand luggage violates consumer rights. Although it made no specific references, I believe this involves Directive 2005/29 (unfair commercial practices).
The idea expressed in the Court’s decision is that hand luggage is a necessary element of air transport, and therefore charging for that service constitutes an unfair practice.
The first flaw in this entire process, in my opinion as a frequent flyer, is the Court’s interpretation of the concept of a “necessary element.” We all have our necessaires, but I think that, with a few exceptions, a backpack that fits under the seat is more than enough for that purpose. On dozens of transcontinental trips in recent years, I have only carried a backpack, checking larger bags into the hold. If this is true for a 7- or 17-hour trip, a fortiori it will also be true for a 2-hour trip.
Let’s be honest: people take bags into the cabin for one of three reasons: to avoid waiting for the luggage to be delivered after the trip, to avoid delays due to a close connection, or to save the cost of checking-in the bag. None of these reasons fits the concept of a “necessary element.”
The second flaw in the process is the belief, on the part of regulators in Brussels, that the new regulation is a way to protect consumer rights. Perhaps yes, but probably not—for several reasons.
First, we have the so-called “waterbed effect” (if someone sits on one end of the mattress, the other end pops up). In this case, it means that, unable to charge for hand luggage, Vueling will in effect raise ticket prices. In fact, in a theoretical world where all passengers behave the same way, economic analysis predicts a fare increase exactly equal to the “savings” on the cabin baggage fee.
Mr. Matteo Ricci, vice-chair of the EU’s Committee on Transport and Tourism, proudly states that the proposed legislation “marks an important step towards fairer and more transparent travel.”
Let’s break it down, starting with fairness: in practice, there are different types of passengers. For a passenger (like me) who checks his luggage, the only effect of the Court’s decision is that I will pay a higher fare without any benefit in terms of baggage. Basically, I will be subsidizing other passengers. The reader can decide whether this is “fairer travel.”
As for transparency, I admit the regulators have a point: consumers are often misled, promised one price and then asked to pay another (higher) price. In fact, across the Atlantic, the Biden administration has set in motion legislation against the practice of drip pricing. In May this year, the FTC’s (Federal Trade Commission) final rule came into effect to combat so-called junk fees, initially focusing on live-event tickets and short-term lodging. The idea is that the total price, including all mandatory and unavoidable fees, must be displayed from the start of the purchase, i.e., it cannot be revealed only at the final checkout stage.
I fully support increasing transparency and avoiding junk fees, but setting prices (as the EU now wants to extend across Europe) is not the way to do it.