European Air Fares Rising Slower than Inflation
By Sharon Petersen Tue Dec 5, 2023
The International Air Transport Association (IATA) has revealed data indicating that air fares in Europe are undercutting inflation, marking a positive trend in the post-COVID recovery phase.
Recent traffic statistics demonstrate that European carriers are only 3.6% below the peak levels observed in 2019. Despite an inflationary backdrop, European travelers are actively exploring air travel, with June witnessing average airfares in the region rising by approximately 16% compared to the pre-pandemic era. However, this increase is trailing behind the European Union's consumer price index, which, in June, registered a 20% surge over pre-pandemic levels.
Willie Walsh, Director General of IATA, highlighted the robust recovery of European air travel, projecting that it is poised to surpass the 2019 benchmark by 2024. The competitive nature of Europe's air transport market has played a crucial role in keeping airfare inflation at 16%, a notable accomplishment considering the challenges posed by fluctuating jet fuel prices and rising workforce salaries. Walsh emphasized the contrast between the achievements of the airline industry and the escalating charges imposed by infrastructure suppliers.
Notably, recent regulatory decisions have seen the UK Civil Aviation Authority approving a 56% increase in charges for London Heathrow and a 26% increase for NATS, the UK's air navigation services provider. Amsterdam's Schiphol airport in the Netherlands, despite experiencing service failures, has been granted a 37% increase.
Walsh stressed the pivotal role of regulators in fostering conditions for airline competition. While acknowledging the success of light-touch consumer regulation and European slot regulations in promoting consumer choice and flexibility, he called for stronger regulation of monopoly infrastructure providers to reduce charges. Additionally, Walsh advocated for the reform of consumer protection regulation EU261 to ensure consistent application and a fair distribution of accountability across the aviation value chain.
The data was presented at the Wings of Change Europe (WOCE) event in Amsterdam, the Netherlands, held on 14-15 November, with KLM as the lead sponsor. WOCE serves as a prominent industry gathering, bringing together aviation leaders, regulators, and subject matter experts to discuss key issues in air transport.
Have questions or want to share your thoughts?
