EasyJet said proposals to enforce free additional cabin bags on planes across Europe are a “lunatic idea”, warning of fare rises and flight delays if legislation goes through.

The European parliament last week voted overwhelmingly to give all passengers the right to carry on a small case, as well as the free underseat bags currently permitted.

Kenton Jarvis, easyJet’s chief executive, said giving all passengers the right to extra free carry-on baggage would be “crazy European legislation” and “terrible for the consumer”.

As part of a bill to strengthen rights for passengers, MEPs have swung behind proposals to allow passengers to take one “personal item”, such as a handbag, backpack or laptop, as well as a piece of hand luggage weighing up to 7kg (15lbs) and with combined dimensions of 100cm (39in).

The case alone would be bigger than the current maximum permitted free cabin item on Ryanair and others.

The changes, which need ratifying by the European Council before becoming law, would apply to all passengers travelling to or from an EU airport using an EU-based airline – directly affecting the vast majority of short-haul flights from the UK.

Jarvis said any new rules would probably be applied consistently across all its fleet, regardless of jurisdiction.

The easyJet boss said it was “politicians completely not understanding their subject and getting involved with things they shouldn’t”, adding: “There just isn’t the space in the cabin, so that’s another lunatic idea. We would go back to the days of having to offload cabin bags and put them in the hold – it was one of the number one causes of delayed boarding in the old days.”

Bag charges made up a large proportion of more than £2.5bn in easyJet’s annual income from extras, or ancillary revenue, “and that would have to be passed on” in fare rises for all passengers, he said.

“I just can’t explain how stupid it would be, just crazy European legislation,” Jarvis added.

While on some easyJet flights, the advertised fare can cost less for a passenger than the price of bringing on luggage, Jarvis argued the total cost represented “incredible value”.

The airline was rapped this week by the advertising watchdog for claiming the cost for bringing luggage was as little as £5.99. The Advertising Standards Authority said easyJet had not provided evidence that such prices were widely available. Jarvis called the ruling “irritating” but said easyJet had now amended the wording on its website.

Meanwhile, he said easyJet was talking to Starlink with a view to eventually offering wifi on its planes, but had concluded, like Ryanair, that “the economics of the deal don’t work … When the time’s right, we’ll look to add that service, but it’s not today”.

A recent public spat between Ryanair’s chief executive, Michael O’Leary, and Starlink’s owner, Elon Musk, over the worth of its wifi saw both calling the other an “idiot”.

While Musk’s political activities in the US have been followed by a drop in Tesla sales in Europe, Jarvis said he would not shy away from the brand association: “It will be difficult to deliberately buy an inferior product for your customers because you have opinions on the CEO.

“Equally, if you weren’t buying [Starlink], you’d probably be buying the other one from Jeff Bezos. It’s always going to be one of the guys when it comes to satellites.”

The comments came as the airline announced increased losses for the last quarter, a pre-tax loss of £93m, up 50% from the same period the previous year, despite a 7% rise in passenger numbers for the period.

Jarvis said the losses were partly due to investment in bases at Milan Linate airport and Rome Fiumicino airport, where the airline has to initially run unprofitable routes under a regulatory agreement.

He said January bookings for the year ahead were at record levels, with the airline’s passengers travelling further afield to destinations including Morocco, Tunisia, Cape Verde and Georgia.