EU air passenger reform: airlines must show cabin bag price upfront, while delay payouts stay unchanged

A decade of stalemate

The EU’s passenger-rights reform began when the Commission tabled a proposal in March 2013. The Parliament took a negotiating position a year later, but the file then gathered dust in the Council for roughly ten years. Under the Polish presidency in 2025, the 27 member states finally reached a common position, though deep divisions remained. Last Friday the Council gave the green light, and on Monday the European Parliament completed the final step, allowing its president and the Cypriot transport minister to sign the text. The Irish presidency, due to begin in July and where Ryanair is headquartered, was seen as a potential obstacle, adding urgency to clinching a deal now.

The cabin luggage compromise

The most corrosive issue was the right to carry a cabin bag. A 2024 Spanish consumer ministry ruling fined five low-cost airlines €179 million for charging extra for hand luggage, drawing on a Court of Justice of the EU judgment. Yet the final agreement does not guarantee a free cabin trolley. Instead, airlines must display a basic fare that includes the bag as the default option in online searches. Afterwards, carriers may offer discounts to passengers who travel without a carry-on.

The market has changed so much since the process began that the regulation no longer meets current needs and goes against the consumer philosophy of recent years.

Airlines such as Ryanair derive more than €4 billion annually from ancillary services. Industry voices say the rule forces them to embed the cost into the headline fare, which will rise substantially. A small personal item that fits under the front seat remains free of charge.

Compensation thresholds untouched

Pressure from some capitals to weaken delay-payout rules failed. Compensation kicks in after three hours and stays at €250 for flights up to 1,500 km, €400 for intra-EU journeys or routes between 1,500 and 3,500 km, and €600 for all other distances.

Families and accessibility

Airlines are banned from charging families or dependents extra to sit together. Minors under 14 must be seated alongside their parents at no additional cost, and the same protection applies to dependent adults accompanied by a carer. Strollers can be deposited at the aircraft door and collected there at journey’s end. Passengers with reduced mobility who miss a flight because they did not receive the assistance they required also gain new safeguards.

We make it easier for passengers to defend their rights and claim compensation. The legislation strengthens passenger rights and guarantees clarity and predictability for our airlines.

Controversy and next steps

Spain and Latvia voted against the text in the Council, while Finland and Austria abstained. Spain’s consumer ministry, led by Pablo Bustinduy, argued the deal failed to enshrine free carry-on luggage, a right it says is backed by national courts and the EU tribunal. The Commission has opened an infringement procedure against Spain over its fines on low-cost carriers. The reform will be published in the EU’s Official Journal and become applicable twelve months after entry into force, expected by mid‑2027.

The revision will provide legal certainty, fairness and greater protection for millions of European air passengers, while offering a fair balance for airlines.