European air fares now rising slower than inflation

Passengers at Amsterdam Schiphol airport.
Franklin Heijnen, CC BY-SA 2.0, via Wikimedia Commons

The International Air Transport Association (IATA) has released data showing that travelers in Europe are benefiting from air fares that are undercutting inflation, as the market continues its post-COVID recovery. 

The latest data shows a remarkable rebound in the European air travel market post-COVID. The latest figures indicate that European carriers are merely 3.6% below the 2019 peak, defying the odds of inflation.

Europe’s Air Travel Resilience

Travelers seem undeterred by the economic landscape, with average airfares in Europe in June soaring 16% higher than pre-pandemic levels.

This rise, while substantial, lags behind the European Union’s consumer price index, which stood at a 20% increase in June compared to the pre-pandemic era.

“European air travel is continuing to recover strongly and is on track to exceed the 2019 benchmark in 2024,” states Willie Walsh, IATA’s Director General.

He emphasizes the resilience of Europe’s air transport market, with airfare inflation capped at 16%, a noteworthy four percentage points below the broader consumer price index.

Walsh attributes this achievement to the competitive nature of the market, despite challenges such as volatile jet fuel prices and rising workforce salaries.


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Catalysts and Challenges

Recent developments in the regulatory landscape paint a mixed picture. The UK Civil Aviation Authority (CAA) approved a substantial 56% increase in charges for London Heathrow, coupled with a 26% increase for NATS, the UK’s air navigation services provider.

Simultaneously, Amsterdam Schiphol airport in the Netherlands, despite service failures, secured a 37% hike.

Polderbaan Runway At Schiphol To Close For Maintenance
Photo Credit: Amsterdam Schiphol Airport.

Regulators wield significant influence in fostering conditions for airline competition. Europe’s regulators have earned commendation for implementing a light-touch consumer regulation that empowers airlines to offer diverse choices by unbundling travel packages.

The European slot regulation strikes a balance, ensuring consistent schedules while enhancing accessibility for new entrant airlines.

Areas for Regulatory Enhancement

Amid the positive momentum, there are areas where regulators could further enhance competitive conditions. Two key aspects beckon attention:

Monopoly Infrastructure Providers: Stricter regulation is needed to curb charges imposed by monopoly infrastructure providers.

Consumer Protection Regulation EU261: Reforms are essential to ensure a more consistent application of its aims and a fairer distribution of accountability across the aviation value chain.

“The recovery of Europe’s air transport market is fostering more competitive conditions, visible in the emergence of 20 new airlines last year.”

“This competitiveness not only benefits consumers with increased routes and choices but also positions Europe as a more competitive business hub,” highlights Walsh.

Wings of Change Europe

This insightful data on European air fares and the sector recovery was unveiled at the Wings of Change Europe (WOCE) event in Amsterdam, with KLM as the lead sponsor.

WOCE serves as a flagship industry event, bringing together aviation leaders, regulators, and subject matter experts to deliberate on air transport’s pressing issues.

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By Len Varley - Assistant Editor 4 Min Read
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