Cost of going green: Airline passengers face higher airfares under new emission rules
Lufthansa was the latest to add ‘environmental charge’ on Tuesday after Air France in 2022
Dubai: As a sign that the super low-cost air travel era may end, airline passengers face higher fares due to newly strengthened European Union (EU) regulations to reduce aviation emissions and combat climate change.
The EU wants carbon-intensive industries, including aviation, to pay more for pollution. Aviation accounts for 2.5 per cent of global carbon emissions, but it has contributed around 4 per cent to global warming to date.
Lufthansa, Germany's flag carrier, said Tuesday it would add an environmental charge of up to 72 euros (Dh282.3) to its fares, joining at least one European rival in doing so as the industry battles to cover the cost of new EU rules on reducing emissions.
Air France-KLM imposed an SAF (sustainable aviation fuel) contribution charge in January 2022, which was up to 12 euros on business fares and up to four euros on economy fares.
Singapore’s government also introduced a levy on flight tickets earlier this year to help fund the additional cost of SAF.
Top officials, including Emirates President Sir Tim Clark, had said at the International Air Transport Association (IATA) annual general meeting (AGM) in Dubai earlier this month that transitioning to net zero will require airline customers to pay more for their air tickets, at least in the short term.
“I believe that as we move to 10 per cent SAF (sustainable aviation fuels) by whatever date that is, and it starts to scale, the unit costs will start to fall,” Clark said earlier this month. “It is very important to understand that in the short term, if you are uplifting 10 per cent of your fuel and it comes out at three times the price of SAF of JP-1 (a kerosene-type jet fuel) today, then obviously it will have a knock-on effect on pricing,” said Clark.
The Emirates Airlines President said that if blending SAF with fossil fuel prices remains in equilibrium and doesn't spike, the airline can absorb some, but not all, of those cost increases in the business.