June 2023
European airfares have witnessed a 16% surge compared to pre-Covid rates, according to data released by the International Air Transport Association (IATA). Despite this increase, IATA highlights that the rise in flight prices is below the overall inflation rate within the European Union.
Key Points:
- Price Trends: Flight prices in Europe were 16% higher in June 2023 than in the same month of 2019, marking a post-Covid escalation. However, this surge is below the EU’s average inflation rate of 20% during the same period.
- Peak and Dip: The peak in airfares occurred in early 2023, exceeding 20% compared to the same period in 2019. Nevertheless, a slight dip was observed up to June 2023.
- Passenger Numbers: Despite the inflationary environment, the latest traffic figures from Europe’s airlines indicate that passenger numbers are only 3.6% below 2019 levels. This suggests that Europeans are actively traveling amidst the challenging economic conditions.
- Recovery Outlook: Willie Walsh, IATA’s director general, expressed optimism, stating that European air travel is on a robust recovery path. He anticipates exceeding the 2019 benchmark in 2024, emphasizing that the competitive air transport market in Europe is containing airfare inflation at 16%.
- Market Conditions: Walsh emphasized the significance of a competitive air transport market, attributing the 16% inflation rate to Europe’s market competitiveness. He contrasted this with the increasing charges imposed by infrastructure providers, especially citing recent hikes in airport charges at major hubs like London Heathrow and Amsterdam’s Schiphol airports.
- Calls for Regulation: Walsh urged authorities to enforce stronger regulation on monopoly infrastructure providers to reduce charges. He also advocated for a reform of the consumer protection regulation known as EU261.
- Market Expansion: Highlighting positive aspects, Walsh pointed out that the recovery in Europe’s air transport market has led to more competitive conditions. The emergence of 20 new airlines in Europe in the past year contributes to a broader range of choices for consumers.
In conclusion, the recovery of Europe’s air transport market, though accompanied by increased airfares, brings about a more competitive landscape. Walsh’s call for regulatory measures reflects the industry’s need to balance growth with consumer-friendly policies.
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