ACI EUROPE refuted claims made by IATA that the increase in airfares in Europe is well below inflation while airport charges would have increased much above it.
ACI EUROPE Counters IATA Airfare Claims
IATA states that airfares in Europe only increased by +16% as of June this year compared to 2019. Independent and authoritative data differ. ACI EUROPE presents RDC data, which shows an increase standing at +38% over the peak Summer months (Q3). That is nearly two times the increase in the average consumer prices index (+20.8%). October confirmed this trend, with airfares increasing further at +47% when booked three months in advance.
Olivier Jankovec, Director General of ACI EUROPE, said: “Confronted with inaccurate and misleading data, it is crucial to set the record straight about how air fares and airport charges have actually evolved. Not only have airlines been able to reflect inflationary pressures in what they charge consumers, but they have been able to exert significant pricing power thanks to supply pressures and capacity discipline. Good for them!
“Conversely, many airports have yet to fully reflect inflationary pressures in their user charges, with regulators often oblivious of these pressures and of how debt accumulated through COVID is hurting their investment capabilities.
”Beyond that, it is also puzzling to hear IATA asserting that the recovery of the European aviation market is bringing even more competitive conditions, with more airlines and more routes to choose from. The reality is that air connectivity has recovered at a slower pace than passenger volumes. As of June, air connectivity from European airports remained -17% below pre-pandemic (2019)5 levels, while passenger traffic was at -5.9%.”
Jankovec also noted, “This means that in addition to paying much inflated airfares, consumers tended to have fewer options to choose from. I am sure this is something many Europeans reckon with and have experienced first-hand this Summer.”
ACI Disputes IATA Claims on Airport Charges
ACI EUROPE says IATA’s assertion that airport charges have continuously increased above inflation does not stand scrutiny. The airport group says IATA relies on flawed data from just two airports. ACI EUROPE asserts airport charges in Europe this year have increased by +13.6%4, far below the inflationary pressures hitting airports.
According to IATA, airport charges at London Heathrow are expected to surge by 56%. However, ACI EUROPE points out the UK CAA has recently approved a reduction of 20% in charges effective from January 2024. IATA also highlights a 37% increase in charges at Amsterdam-Schiphol airport. The airport group says the airline association fails to mention the significant downward trend these charges have experienced since 2012. These figures pertain to airport charges for the top 50 European airports, considering a range of aircraft types and passenger volumes. The index for each airport is weighted based on the actual share movements of different aircraft sizes.
Jankovec concluded: “The market has structurally changed through the pandemic and the recovery, and it is crucial that policymakers and regulators now see through these changes and what lies ahead. In particular, the acceleration of airline consolidation coupled with airports reaching capacity limits will challenge our Single European aviation market and air connectivity developments. This is where economic regulators should step back, as the dominance of airlines today makes price regulation of airports obsolete. This is also where the 30-year-old EU regulation on airport slots requires urgent review.”
Statistics from the Airport Industry Connectivity Report 2023 are available.
About ACI Europe
ACI EUROPE is the European Airports Council International (ACI) branch, the only global professional association for airport operators. ACI EUROPE represents more than 500 airports across 55 countries. These airports handle over 90% of the commercial air traffic in Europe. The air transport industry also plays a substantial role in the European economy. It supporting 13.5 million jobs and contributing €886 billion to the European economy, equivalent to 4.4% of GDP.
In recognition of the Climate Emergency, ACI EUROPE members have committed to achieving Net Zero carbon emissions from their operations by 2050 without relying on carbon offsetting.