EU court adviser says Vueling baggage charges comply with EU law

By Foo Yun Chee

BRUSSELS, Jan 23 (Reuters) - An adviser to Europe's top court has backed a key element of budget airlines' business model, saying extra charges levied by Spanish carrier Vueling for checking in baggage are in line with European Union rules.

Budget airlines generate a hefty chunk of their revenues from supplementary fees related to check-in, luggage and boarding passes, which for some carriers could be as much as two-fifths of their turnover.

Ultra low-cost U.S. carrier Spirit Airlines (NasdaqGS: SAVE - news) , for example, makes around 40 percent of its revenue from extra costs like bag fees and seat selection, and its CFO Ted Christie told a conference in Dublin this week he would like to see more.

"We try not to put a ceiling on it, but we would love to get at least parity between ticket and non-ticket," Christie said.

The non-binding opinion from Yves Bot, an advocate general at the Luxembourg-based EU Court of Justice, came in a case involving International Airlines Group's low-cost Spanish unit Vueling.

Judges, who typically follow the advisers' recommendations in the majority of cases, will rule in the coming months.

Vueling found itself in a Spanish court after a passenger complained about a 40-euro surcharge levied by the company for checking in two pieces of baggage online. It was later fined 3,000 euros by a Spanish consumer body.

A Spanish court subsequently sought guidance from the ECJ as to whether Spanish laws which ban baggage check-in charges comply with EU rules.

Bot said they did not.

"The Spanish legislation which prohibits air carriers from charging for checking-in passengers' baggage in the form of an optional price supplement is incompatible with EU law," he wrote in his opinion.

But he said airlines needed to be clear about the various charges that passengers may have to pay.

"Air carriers must communicate in a clear, transparent and unambiguous way, at the start of the booking process undertaken by the customer, the detailed rules for pricing relating to checking-in of baggage and allow the customer to accept or refuse the service in question on an opt-in basis," Bot said.