Low-Cost Over

From the DW:

“Why the era of low-cost flights in Europe may be over”

The days of cheap airfares seem to be over in Europe. In most places, a return to pre-pandemic flight pricing is nowhere in sight. This is confirmed, for example, by figures from the German Federal Statistical Office, which reported that the average price of an international flight in April 2023 was 33.4% higher than a year prior. "Just as we are all currently experiencing huge cost increases, driven particularly by high fuel and energy prices, costs are going up for airlines, airports, maintenance companies and service providers," says aviation expert Cord Schellenberg. In addition, demand for air travel in Europe has been very high since travel became more affordable. But flight capacities are not as high as they were in 2019. "So high demand is meeting tight supply." According to figures from the German Aviation Association (BDL), air traffic in Germany last year was 70% of what it was in 2019. "This means that the recovery in Germany is slower than in other European countries where in 2022, flight offers were at 84% of what they were in 2019," the BDL said in its latest industry report.

Pricey summer flights  The online price comparison website Idealo recently reported that summer flight fares were up 20% from last year. "At the moment, passengers are willing to pay the higher prices," says Schellenberg. "It remains to be seen whether this is due to the catch-up effect — that people can finally travel again after the pandemic — or a general change in attitude. Air travel may simply cost more because it used to be too cheap." Yet Christoph Brützel, a professor of air traffic management at the International University of Applied Sciences in Bad Honnef, Germany, expects prices to drop, at least in the short term. "Next year, they will likely fall again," he suspects. Brützel says price drops will result from airlines starting to increase their capacity.

No more super cheap fares Nevertheless, there is much to suggest there will be no return to the sometimes extremely low plane fares of the past. Ryanair CEO Michael O'Leary, for example, recently admitted that the days of €10 ($10.80) bargain tickets are over. The airline's average ticket prices will rise €40 to €50 ($43-$57) over the next few years, he told the BBC. The main reason, he said, is high jet fuel prices. This is confirmed by Harald Zeiss, a professor at Harz University of Applied Sciences in Wernigerode, Germany, whose research focuses on sustainability in tourism. "Fossil fuels will become very expensive," he says. "If you rely on kerosene, you will have no choice but to pass on the rising costs to customers," he told DW. This is especially true as the aviation industry comes under increasing pressure to answer for the environmental damage it causes. "The environmental costs of flying should be reflected much more strongly in airfares," says Werner Reh, a spokesman for the transport working group at the environmental protection association BUND. "One ton of CO2 causes climate damage amounting to €180 ($195)," he says. The simplest way to price this in, he says, is with a kerosene tax. An economy flight from Germany to the Dominican Republic would be about €180 ($195) more expensive, he calculates. However, Reh says implementing such a tax at the international level would be "extremely difficult."

Sustainable fuels drive up costs The increasing use of sustainable aviation fuels (SAF) is more likely to drive up costs for airlines in the coming years. The EU's "Fit for 55" measures, for example, which aim to reduce net greenhouse gas emissions by 55% by 2030, stipulates that more sustainable aviation fuels are used, including mixed fuels. For airlines, this means fuel cost increases of up to 16% per ton compared to pure fossil kerosene, according to a recently presented study by auditing firm Pricewaterhouse Coopers Germany. "Those who want to fly more sustainably in the future will have to pay more for it," says Jan Wille, co-author of the study. Meanwhile, the economic research institute SEO Amsterdam Economics has calculated that the "Fit for 55" package will increase the price of a return flight within Europe over a distance of 3,000 kilometers by €45 ($49) by 2030 and by €65 ($71) by 2035. Meanwhile, in another study, researchers found that eliminating greenhouse gas emissions from European aviation by 2050, as targeted, will cost a total of €820 billion ($897 billion). One consequence of this, researchers say, will be higher ticket prices.

^ I think the main reason for the decline in low-cost flights is because airlines have seen they can charge more and Customers will continue to fly. ^

https://www.dw.com/en/why-the-era-of-low-cost-flights-in-europe-may-be-over/a-65939226