Airlines will be banned from charging parents to get seats next to their children under an EU reform of passenger rights agreed on Friday that stopped short of more divisive changes, diplomats said.

EU countries had wanted to trim the compensation air carriers currently have to pay out for cancelled flights and long delays. But the plans were ditched after months of negotiations, having met fierce resistance from European lawmakers.

A parliamentary push to ban flight operators from charging for carry-on luggage was similarly abandoned in favour of a provision compelling websites selling tickets to display prices including hand luggage.

"We have successfully defended air passenger rights," Jan-Christoph Oetjen, a German lawmaker involved in the talks, said.

More than a decade in the making, the reform leaves in place Europe's current compensation system.