According to Open4Business, a review of EU air passenger rights regulations could pose a serious challenge to the business model of Wizz Air and other ultra-low-cost carriers, which generate revenue not only from base fares but also from a wide range of additional paid services.
European institutions are discussing updates to the rules regarding compensation for flight delays and cancellations, passengers’ rights to hand luggage, seating arrangements for families, transparency of additional charges and the handling of complaints. For traditional airlines, this means an increased compliance burden, but for ultra-low-cost carriers the potential impact could be greater, as a significant portion of their revenue comes from ancillary revenue — baggage fees, seat selection, priority boarding, rebooking and other services.
Wizz Air is one of the most prominent examples of this model in Europe. The company’s base fare usually includes a minimal set of services, with many aspects of the journey charged for separately. The official Wizz Air website states that passengers may take one piece of hand luggage measuring up to 40 x 30 x 20 cm on board free of charge, which must fit under the seat. Larger cabin baggage, hold luggage, seat selection and a range of other services are subject to an additional charge.
It is precisely this model that allows low-cost carriers to offer a low base fare, whilst simultaneously increasing average revenue per passenger through additional services. If the EU introduces stricter requirements for free hand luggage, seats children next to accompanying adults, or caps certain charges, part of the airlines’ revenue could come under pressure.
The key discussion centres on the revision of Regulation (EC) No 261/2004, which governs compensation and assistance to passengers in the event of denied boarding, cancellations and long flight delays. According to the European Parliament’s analytical service, in 2025 the Council of the EU proposed changing the compensation thresholds, specifically to set longer delay thresholds for payments, whilst the European Parliament advocates maintaining stricter passenger protection and additional rights, including tougher rules on hand luggage and a ban on unfair ancillary charges.
For Wizz Air, the risk lies in the regulator potentially affecting two pillars of its business model at once: revenue from ancillary services and operational discipline. Ultra-low-cost carriers operate with high fleet utilisation, tight schedules and rapid aircraft turnaround. Any new requirements regarding passenger service, compensation, transfers, baggage or accommodation could increase costs and reduce flexibility.
The issue of hand luggage could prove particularly sensitive. Currently, many European low-cost carriers distinguish between a small bag stored under the seat and a full-sized cabin bag, which is placed in the overhead compartment.
If the new version of the rules enshrines the passenger’s right to a larger free carry-on bag, this will hit one of the usual sources of additional revenue. Furthermore, airlines may face an operational problem: there is simply not enough space in the cabins of narrow-body aircraft to accommodate all passengers’ full-size luggage.
The second sensitive issue is family seating. If airlines are obliged to seat children next to their parents or accompanying adults free of charge, this will limit the monetisation of seat selection. For passengers, this would be an improvement in service, but for low-cost carriers, it would mean a loss of revenue from seat selection.
The third area concerns compensation for delays and cancellations. The current EC261 regulation provides for payments of between €250 and €600 depending on the flight distance, subject to certain conditions. Wizz Air explicitly states the following compensation amounts for EC261 on its website.
Airlines and industry associations warn that extending passenger rights could significantly increase their costs. According to estimates cited in the industry debate, the current EC261 regime already costs European carriers around €8 billion a year, and extending the requirements could increase this figure.
However, for passengers and consumer organisations, the argument is the opposite: the European air travel market has become more complex, and many charges and restrictions have become opaque. From this perspective, tightening the rules should not destroy the low-cost model, but make it fairer — so that the final ticket price is clearer from the very start of the purchase.
For the markets of Central and South-Eastern Europe, potential changes are particularly important. Wizz Air holds a strong position in Hungary, Romania, Poland, Serbia, North Macedonia, Albania, Bosnia and Herzegovina, and other countries in the region. For many airports and passengers, the company has become a key provider of affordable international flights. Any change in the low-cost carrier sector could affect flight frequencies, prices and the availability of routes.
On the other hand, pressure on Wizz Air does not necessarily mean abandoning the current model. The company can adapt by introducing more expensive base fares, new package deals, optimising its schedule, revising its baggage policy, digitising claims processing and improving turnaround times