British tourists have been warned that they will have to pay extra to fly to destinations including Majorca and other Balearic Islands due to the introduction of a new environmental charge.
Lufthansa will add a charge of up to 72 euros (£60), joining at least one other European rival as the industry battles to cover the cost of new European Union rules on reducing emissions, the airline group said on Tuesday.
Airlines have been warning for several years that regulations requiring them to use more extensive sustainable jet fuel could drive up costs. This comes on top of ticket prices having already surged in the post-Covid travel boom.
Such prices are now fuelling fears that further increases could start deterring travellers from flying.
Fares will increase from between 85p to £60 depending on the type of ticket, on all flights departing from EU countries, Britain, Norway and Switzerland, Lufthansa said.
Some of the increases are effective from June 26 for departures starting from January 1, 2025 onwards.
The charge would “cover part of the steadily rising additional costs due to regulatory environmental requirements” such as sustainable aviation fuel (SAF) made from bio-based materials – regarded as crucial to making flying less polluting.
Following the news, shares in the German airline hit an intraday low, but recovered later in the day.
Aviation is deemed responsible for about two percent of the world’s emissions, but is considered one of the hardest sectors to decarbonise as fuel for flights cannot be easily replaced with other kinds of power, the Majorca Daily Bulletin reported. European regulators introduced rules that ask fuel suppliers to ensure two percent of fuel at EU airports is SAF by 2025, rising to six percent in 2030 and 70 percent by 2050. Many argue that such measures will increase costs for the aviation sector.
“I think it is logical to assume that other airlines will follow Lufthansa’s lead as it looks to pass on the increasing cost of environmental regulations in the EU,” said Dudley Shanley, an analyst at Goodbody.
Air France-KLM had already imposed an SAF contribution charge in January 2022, adding about £10 on business fares and over £3 on economy fares at the time. However, according to a person familiar with the matter, Air France is now considering implementing measures similar to Lufthansa, suggesting that a charge could be higher, the Majorca Daily Bulletin also reported.
“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 in an emailed statement to the newsite.
British carrier, easyJet, however said that they did not plan on following Lufthansa’s footsteps, with a spokesperson telling Reuters, “We don’t apply legacy carrier surcharges and have no plans to do so”. Instead, easyJet has focused much of its environmental strategy on carbon reductions using hydrogen technology.
Wizz Air also said it would avoid additional surcharges, adding in a statement that “in order to avoid burdening passengers with higher costs we urge governments to provide incentives to enable the aviation industry to achieve its environmental goals more effectively.”
British Airways owner IAG and Ryaniar did not respond to Reuters’ request for comment on whether they had plans to implement similar measures.
Lufthansa CEO Carsten Sphor warned last year that the EU targets would be difficult to achieve and hinted that higher costs would pass on to customers.
The surcharge – called an “Environmental Cost Surcharge” – will apply for all airlines in the Lufthansa group except for Eurowings tickets sold directly by the company, a spokesperson said.
On short and medium-haul flights, the fares will increase by up to £4.23 in economy and £5.92 for business class, while long-haul flights will go up between £15.23 and £30.47 for business fares and about £60 for first-class fare from 2025, Lufthansa confirmed to Reuters.
A spokesperson also said that the move was not tied to the airline’s high labour costs after strikes earlier this year, which led the airline to issue a profit warning ahead of its first quarter results.
He added the additional costs weren’t expected to increase any further for the time being.