EasyJet generates a record $4.5 billion in revenue from ancillary services, with CEO criticizing a 'disproportionate' penalty for the practice.

• On Wednesday, EasyJet announced that it had reached a record £3.59 billion ($4.5 billion) in revenue from selling additional services to passengers, including extra baggage, during the fiscal year up to October.
• Johan Lundgren, CEO of the company, stated that the recent fine imposed by Spain's Ministry of Consumer Rights on such charges was "unfair," and that the practice helped keep fares low.
• EasyJet's full-year profit before tax was £610 million, exceeding analyst expectations and increasing by 34% compared to the previous year.

The budget airline made £3.59 billion ($4.5 billion) from charging passengers for flight and holiday add-ons in the full year to October, as its CEO criticized a recent Spanish fine over the practice.

The airline segment of the easyJet group experienced a 13% increase in ancillary revenue, reaching a record high of £2.46 billion, while the overall group saw an increase of 22% year-on-year.

Airlines have increasingly turned to charging for additional services to offset the decline in revenue from basic fares as competition for low-cost flights intensifies.

The Spanish Ministry of Consumer Rights penalized five low-cost carriers, including easyJet, Norwegian, Vueling, and Ryanair, for engaging in abusive practices such as charging extra for hand luggage or reserving adjacent seats to accompany dependent persons. EasyJet was fined 29 million euros.

On Wednesday, easyJet CEO Johan Lundgren stated on CNBC's "Squawk Box Europe" that they completely disagree with the statement and believe it contradicts European law, which will ultimately prevail.

"The notion that you should not be allowed to sell products and services to people who want to use them is highly unfair. One-third of our customers do not purchase any additional services, so why should they be concerned about the cost of something that someone else is willing to pay?"

"It's beneficial for customers and helps maintain low fares," he stated.

The Association of Airlines (ALA), Ryanair, Norwegian, and easyJet all criticized the fines and said they would dispute them last week.

Spain's Ministry of Consumer Rights accused the airlines of "disproportionate and abusive" pricing practices for printing tickets and of failing to provide clear pricing information on their websites, which are increasingly common.

On Wednesday, EasyJet reported a full-year profit before tax of £610 million, which was in line with analyst predictions and represented a 34% increase from the previous year.

Lundgren informed CNBC that the company's record summer performance and reduced losses during winter contributed to its improved performance, backed by "quiet strong" demand.

He stated that travel and holidays are highly prioritized by consumers throughout Europe.

EasyJet shares were up 2.5% at 9:13 a.m. in London.

The decline in half-year profits by Ryanair, despite an increase in passenger numbers, was due to several factors including consumer spending pressure, decreased online travel agency bookings, and repeated delivery delays from a U.S. aircraft manufacturer.

Boeing's B737-Max aircraft, which has experienced extended delivery delays, is a significant customer for Ryanair, resulting in a need for airlines to adjust their growth plans.

Both airlines, which specialize in short-distance flights within Europe, have recently regained profitability after facing numerous challenges during the Covid-19 pandemic.

The company's results were released on Wednesday and this story has been updated accordingly.