German airline Lufthansa has said that it will add an environmental charge of $77 to its fares. This comes as the aviation industry faces the issue of covering the cost of new EU rules on reducing emissions.
For years, airlines have been cautioning that regulations mandating the use of costlier sustainable jet fuel could result in higher expenses.
The German airline group said that the fares will be going up between $1.07 to $77, varying on the type of ticket, on all flights departing from European Union countries, Britain, Norway and Switzerland. Certain increases will take effect on June 26 for departures scheduled from January 1, 2025 onwards.
The statement indicated that the charge would “cover part of the steadily rising additional costs due to regulatory environmental requirements” including sustainable aviation fuel (SAF) derived from bio-based materials, seen as vital in reducing aviation’s environmental impact.
What do European rules say?
European regulators implemented regulations requiring fuel suppliers to ensure that 2% of fuel at EU airports is sustainable aviation fuel (SAF) by 2025, increasing to 6% by 2030 and 70% by 2050. Many contend that these measures will raise costs for the aviation sector.
Previously, Air France-KLM introduced an SAF contribution fee in January 2022, amounting to an additional 12 euros on business class fares and up to four euros on economy class fares at that time.
“We have a SAF contribution in place, applicable to all flights (not only on departure from Europe) to transparently reflect the additional cost of incorporating sustainable aviation fuel,” an Air France-KLM spokesperson said.
Lufthansa referred to the price increase as an “Environmental Cost Surcharge”, aimed at offsetting a portion of these expenses starting in 2025. According to a spokesperson, this surcharge will apply to all airlines within the Lufthansa group, except for Eurowings tickets sold directly by the company.
For short and medium-haul flights, economy class fares will shoot up by up to five euros, and business class fares by up to seven euros. On long-haul flights, starting in 2025, business class fares will rise by between 18 and 36 euros, while first class fares could increase by up to 72 euros, Lufthansa confirmed to Reuters.
(With Reuters inputs)