Airline fares increase in 2019

A rise in the price of airline tickets is expected in 2019, This increase is driven by five essential elements, according to tourhebdo:

 First element: Increase in the amount of airport charges

In order to finance future developments estimated at 800 million euros in 2019, the ADP group intends to increase the amount of airport fees at Roissy-CDG and Orly by almost 3% compared to 2018.

Following this news, the Trade Union Chamber of Air Transport and the Groundhandling Union, members of the National Federation of Commercial Aviation (Fnam) said that “French and foreign airlines have just rejected unanimously ADP’s tariff proposal “.

Fnam adds, recalling that an increase of + 5.7% since the year 2000 is recorded per year on “airport charges, combined with inflation” … where the traffic increases on average by 3%. The sector raises more than 20 taxes, fees and levies specific to air transport, for a total that represented 4.8 billion euros in 2017.

Second element: Possible rise in the price of oil

The price of oil is a crucial element for airlines, its evolution remains to be monitored in 2019.

Air France-KLM thus recorded a 150 million euro increase in its oil bill for 2018, which demonstrates the importance of this element.

Third element: Strengthening the dollar against the euro

The strengthening of the dollar against the euro is a matter of concern for the airlines. The rise of the dollar does not make the business of the companies, the purchases of fuel and apparatus being invoiced in American currency.

Fourth element: Cost of security

Aviation security costs, included in the airport tax, have increased six-fold since 2000, reaching € 1.1 billion.

Fnam recalls that in France “these costs are entirely financed by the French companies”, unlike what happens in the United States or Italy, and does not hesitate to point to a “consequent increase” in aviation security costs in the years to come.

Airports are planning a deployment estimated at 800 million euros over 5 years for new standard 3 tomographs, which will replace the old X-ray tunnels.

 

Fifth element: Increasing ecological taxation

Ecological taxation will weigh on European companies … a tax on kerosene has been relaunched by former Minister of Ecology Nicolas Hulot, a stimulus proposal that agrees the Minister of Transport Elisabeth Borne and the Minister of Accounts Gérald Darmanin, provided that this is done at European level.

The carbon tax concerns several million euros. “Since 2013, French airlines have been contributing under the European Union (EU-ETS) Greenhouse Gas Emission Trading System for all intra-European flights”, says Fnam.

The program for the reduction and compensation of carbon dioxide emissions in international aviation was adopted in 2016 by 73 countries representing 90% of the aviation activity. This program could possibly (according to the cost study) replace the European system.

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