Amsterdam – The International Air Transport Association (IATA) released data showing that travelers in Europe are benefiting from air fares that are undercutting inflation, as the market continues its post-COVID recovery.
Latest traffic figures show that European carriers sit just 3.6% down on the 2019 peak. Europeans are traveling despite the inflationary environment: In June, average air fares in Europe were around 16% higher than pre-pandemic. However, that is lagging the average consumer prices index for the EU, which in June stood at 20% over pre-pandemic.
“European air travel is continuing to recover strongly and is on track to exceed the 2019 benchmark in 2024. The competitiveness of Europe’s air transport market is holding air fare inflation at 16%–four percentage points below the rises that we have seen in the broad consumer price index. Considering the extreme volatility of jet fuel prices and increases in workforce salaries this is a significant achievement and stands in contrast to the continually increasing charges being pushed by our infrastructure suppliers,” said Willie Walsh, IATA’s Director General.
Recently the UK CAA approved an increase of 56% to London Heathrow’s charges, and an increase of 26% for NATS, the UK’s air navigation services provider, despite its service failure this summer. Meanwhile in the Netherlands, Amsterdam’s Schiphol airport, which has also suffered service failures, has been granted an increase of 37%.
Regulators play a crucial role in generating the conditions under which airline competition has been able to thrive. European regulators can take credit for ensuring a light-touch consumer regulation which has enabled airlines to create tremendous consumer choice and flexibility by unbundling the travel package. And the European slot regulation has created a balance between consistent schedules while increasing accessibility for new entrant airlines.
It’s equally important for…