The End of Super Cheap Fares: Factors Driving Airfare Increases

Passenger aircraft and rising airfare. Discount and booking air ticket. Flight inflation and fuel squandering

Gone are the days of unbelievably low plane fares, according to industry experts. Ryanair CEO Michael O’Leary recently conceded that €10 ($10.80) bargain tickets are a thing of the past. In fact, the airline’s average ticket prices are expected to rise by €40 to €50 ($43-$57) in the coming years due to soaring jet fuel prices. Harald Zeiss, a sustainability researcher at Harz University of Applied Sciences in Germany, supports this claim, stating that fossil fuels will become increasingly expensive, forcing airlines to pass on the rising costs to customers.

Environmental Pressures and the Cost of Flying: The aviation industry is facing mounting pressure to address its environmental impact. Werner Reh, spokesperson for the transport working group at the environmental protection association BUND, argues that the true environmental costs of flying should be reflected in airfares. According to Reh, one ton of CO2 causes climate damage worth €180 ($195). He suggests implementing a kerosene tax as the simplest means to account for these costs. However, Reh acknowledges the challenges of implementing such a tax internationally.

Sustainable Fuels and Rising Expenses: As the use of sustainable aviation fuels (SAF) becomes more prevalent, airlines are projected to face increased costs. The EU’s “Fit for 55” measures, aimed at reducing net greenhouse gas emissions by 55% by 2030, require the use of more sustainable aviation fuels, including mixed fuels. Pricewaterhouse Coopers Germany’s recent study suggests that airlines may experience fuel cost increases of up to 16% per ton compared to traditional fossil kerosene. Jan Wille, co-author of the study, emphasizes that those seeking sustainable flying options in the future should be prepared to pay more.

Implications for Ticket Prices: According to the economic research institute SEO Amsterdam Economics, the “Fit for 55” package is projected to raise the price of a round-trip flight within Europe over a 3,000-kilometer distance by €45 ($49) by 2030 and €65 ($71) by 2035. Additionally, a separate study estimates that achieving carbon neutrality in European aviation by 2050 will cost a total of €820 billion ($897 billion), resulting in higher ticket prices.

As the aviation industry faces increased scrutiny over its environmental impact, the days of extremely low fares seem to be fading away. Rising fuel prices, environmental considerations, and the shift towards sustainable fuels all contribute to the expected rise in airfares. Passengers should anticipate adjusting their budgets to accommodate these changes in the years to come.