Cash-strapped holidaymakers are making their toddlers drag suitcases onboard planes to escape baggage fees, according to Ryanair bosses.

Fewer passengers than ever are checking bags into the aircraft hold. Instead, travellers are avoiding charges by bringing more and more luggage into the cabin.

Ryanair’s chief financial officer, Neil Sorahan, said the airline could review its second bag allowance, introduced in late 2013, as passengers were starting to “take the piss”.

He said: “I’ve seen two-year-olds wheeling a bag up to the plane as people try to take advantage.”

Fewer than one passenger in six now pays to check in luggage on Ryanair. Fares have been driven down as airlines compete to fill their planes; Ryanair is forecasting a further 7% fall in the next 12 months following a 13% drop in average fares from 2016 to 2017.

But it can cost more to check in a bag than purchase a seat, with prices typically up to £90 extra for a 20kg suitcase on a return short-haul summer flight. A two-year-old is entitled, like adults, to bring a 10kg suitcase and a second small bag for free. A one-year-old’s cabin allowance can also account for up to 5kg of the family’s total packing, according to a Ryanair spokesman.

The airline admitted its takings were falling as passengers looked to squeeze ever more into the cabin, although it made a healthy €443m (£396m) profit in the last three months.

Sorahan said: “We’re very generous with our cabin baggage allowance; a 10kg case and a second small carry-on. If everyone does that there’s no issue. It’s the people coming with the kitchen sink that could change the policy.”

Asked by a reporter if passengers were “taking the piss”, Sorahan said: “Some are... The vast majority of people play by the rules but some don’t. Unfortunately some bring massive backpacks and things that don’t fit under the seat. We’ve been a little bit lax or nice – we are victims of our own niceness.”

Ryanair passengers who do arrive with oversized bags risk being told to put them in the hold and charged an extra £50 at the airport.