The government-imposed hike in aviation industry ticket prices - Government steps up ticket prices in air travel sector
Flights in Germany tend to cost more than in most European nations, sparking protests from airports and airlines against additional burdens on passengers. The German aviation industry is fretting over additional state-imposed costs that could drive up ticket prices even further. Based on calculations by the industry association BDL, an extra 1.2 billion euros in taxes and state fees will be tagged onto the current tax burden of 3.3 billion euros this year. Each takeoff from a German airport would result in a state-imposed cost of 30 euros per ticket, according to BDL President Jens Bischof, who suggests that airlines would inevitably pass these costs to passengers.
Eurowings' CEO is pressing for the future federal government to cut location costs for airlines and airports. To encourage growth and reverse the trend, they suggest repealing the aviation tax hike from the previous year and waiving the national blending quota for E-fuel from 2026 onwards.
In 2025, the aviation industry anticipates an additional 1.2 billion euros in costs due to the surge in aviation tax, escalating air traffic control fees due to Corona-related backlogs, exorbitant security checks, and obligatory usage of sustainable fuels. In 2021, state-imposed costs in the German aviation sector amounted to approximately 3.3 billion euros.
The high state-imposed costs are identified as the primary reason for the sluggish recovery and dwindling connectivity of air traffic in Germany in comparison to Europe. Domestic flights and direct connections via low-cost carriers have not rebounded as strongly after the Corona crisis as they have in most other European nations.
Germany is lagging behind, with the total air traffic offer at German airports equaling 86% of the pre-Corona level in 2021, while in other European countries it reached 104%. By the next summer, the ratio will be 91 to 109%. As highlights Bischof, "More is being flown in Europe than ever before - just not from Germany."
Foreign airlines have steered clear of the German market, while domestic providers have curtailed their offerings. A current illustration of this trend is Lufthansa at the largest German airport in Frankfurt. In January, 3.9 million passengers were handled there, down 3.1% compared to the previous year, attributable to the reduced offering of the main customer Lufthansa, according to Fraport.
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Several factors are contributing to the higher flight prices and disruptions in Germany compared to other European countries, affecting the aviation industry in various ways:
- Flight Disruptions and Delays
- Higher disruption rates
- Technical malfunctions
- Regulatory Challenges
- eVTOL Industry Issues
- Complex certification processes
- Economic Viability of Air Taxis
- High operating costs
- Dynamic Pricing and Ancillary Fees
- Dynamic pricing models
- Ancillary fees
- Sustainability and Climate Neutrality
- Limited use of sustainable aviation fuels (SAF)
- Policy initiatives
These factors collectively contribute to higher flight prices and disruptions in Germany, impacting the aviation industry by increasing operational costs, reducing investor confidence, and necessitating more complex regulatory and pricing strategies.
The additional costs due to the surge in aviation tax, escalating air traffic control fees, exorbitant security checks, and obligatory usage of sustainable fuels, primarily caused by the Coronavirus, are expected to add 1.2 billion euros to the aviation industry's costs in 2025. The high state-imposed costs resulting from the Coronavirus have led to a slower recovery and decreased connectivity in German air traffic compared to other European nations.
