Iata claims European air fares rose below inflation this summer

Airline association Iata and European airports association ACI Europe traded conflicting claims on increased charges and rising fares yesterday, with the airports accusing Iata of publishing “inaccurate and misleading” information.

Iata released data suggesting air fares in Europe “are undercutting inflation” despite average fares in June being 16% higher than in 2019.

It pointed out the average consumer prices index in the EU stood at 20% up on 2019 in June.

Iata director general Willie Walsh argued: “The competitiveness of Europe’s air transport market is holding air fare inflation four percentage points below the rise in the broad consumer price index.

“Considering the extreme volatility of jet fuel prices and increases in salaries this is a significant achievement and stands in contrast to the continually increasing charges pushed by our infrastructure suppliers.”

Iata noted the UK CAA recently approved a substantial increase in Heathrow’s charges and a 26% rise in UK air traffic control body NATS’ prices, while Amsterdam Schiphol airport “has been granted an increase of 37%”.

However, ACI Europe hit back with “independent and authoritative data” showing fares were up 38% on 2019 over the peak summer months of July to September, almost twice the increase in average consumer prices.

The association reported fares in October were even higher at 47% up on 2019 when booked three months in advance.

It also hit out at the assertion that airport charges have risen continuously above inflation, suggesting Iata “relies on flawed data from just two airports”.

ACI Europe insisted: “Airport charges in Europe this year have increased by 13.6%, far below the inflationary pressures hitting airports, let alone air fares.”

Olivier Jankovec, ACI Europe director general, accused Iata of publishing “inaccurate and misleading data” and said: “It is crucial to set the record straight.

“Not only have airlines been able to reflect inflationary pressures in what they charge, 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 investment.”

Jankovec argued: “The market has structurally changed through the pandemic and recovery, and it is crucial policy makers and regulators see through these changes.

“The acceleration of airline consolidation coupled with airports reaching capacity limits will challenge our single European aviation market and air connectivity.”

He added: “The dominance of airlines today makes price regulation of airports obsolete [and] the 30-year-old EU regulation on airport slots requires urgent review.”

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