Lufthansa, Europe's leading airline group, announced on June 25 that it will increase ticket prices for all European flights by up to €72 starting January 1, 2025. This price hike is intended to partially cover the costs imposed by the European Commission's new environmental regulations, particularly the mandated use of sustainable aviation fuels (SAF). The increase will affect flights departing from the 27 EU countries as well as the UK, Norway, and Switzerland.
The new regulations require airlines to use a minimum percentage of SAF, which includes synthetic fuels, renewable hydrogen, jet fuels derived from waste gases and plastic waste, or biofuels made from agricultural residues, algae, biomass, or used cooking oil. The mandated SAF share must reach 2% by 2025, 6% by 2030, 20% by 2035, and 70% by 2050, aiming to reduce CO₂ emissions from European air transport by about two-thirds by mid-century.
Currently, aviation accounts for approximately 4% of European greenhouse gas emissions and poses a significant climate risk due to additional effects such as nitrogen oxides and condensation trails. Despite these challenges, only a small fraction of the population uses air travel.
Lufthansa highlighted that global SAF production is significantly lacking, with 2023 production levels meeting only 0.5% of global commercial air transport fuel consumption. "The more SAF production increases, the more their price will fall," a Lufthansa spokesperson told AFP. Until SAF prices decrease, Lufthansa will continue to pass on the additional costs to passengers.
To address the SAF production shortfall in Europe, major European airlines, including Lufthansa, have urged the EU to adopt a model similar to the United States, where production is incentivised financially.
The International Air Transport Association (IATA) emphasised the importance of achieving sustainable profitability to enable airlines to invest in necessary technologies and meet the aviation sector's goal of net-zero CO₂ emissions by 2050. Despite the initial costs associated with the ecological transition, airline revenues remain strong. IATA recently revised its forecast upwards, predicting 4.96 billion tickets sold, $30.5 billion in profits, and an estimated turnover of $996 billion.
