Air fare hikes lagging inflation, says industry body

Post-Covid European airfare increases are lagging the soaring cost of living, says one industry body.

A strong rebound in travel combined with a squeeze on airline capacity sent ticket prices up by as much as 30 per cent over the last two years, according to some calculations.

However, leading industry body the International Air Transport Association (IATA), says European fares are rising at slower rates than the general cost of living.

Association figures, released at this year’s Wings of Change Europe industry gathering in Amsterdam, show that as summer travel kicked off in June, average air fares were around 16 per cent higher than pre-pandemic levels.

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“That is lagging the average consumer price index for the EU, which in June stood at 20 per cent over pre-pandemic,” says the association.

The IATA maintains that traffic figures show that European airline capacity is just 3.6 per cent below the levels it had reached in 2019, the year before Covid grounded travel.

Irishman Willie Walsh, the association’s director general, predicted that European air travel would top 2019 levels next year.

He argued that Europe’s competitive air transport market was holding ticket-price inflation at 16 per cent, four points below general inflation.

“Considering the extreme volatility of jet fuel prices and increases in workforce salaries this is a significant achievement and stands in contrast to the continually increasing charges being pushed by our infrastructure suppliers,” Mr Walsh declared.

He highlighted a recent 56 per cent boost to London Heathrow’s charges, a 37 per cent increase in Amsterdam Schiphol fees and a 26 per cent rise in UK air navigation costs.

Airfares are widely expected to continue increasing. Last week, Ryanair, Europe’s biggest airline, said that tight capacity and rising demand would keep driving up fares over coming years.

While the Irish giant has added aircraft and seats beyond its pre-Covid levels, other European carriers have yet to recover their pre-pandemic size.

Mr Walsh said that European air travel’s recovery was bringing more competition.

“Consumers will see that with more routes and more airlines to choose from,” he predicted.

“This is important because a more competitive air transport market will make Europe a more competitive place to do business.”