As of Jan. 1, 2025, business and other travelers literally will be paying the price of aviation's green energy transition. That is the date from which departures on Lufthansa Group (Lufthansa itself plus Austrian Airlines, Swiss and Eurowings) flights will carry an "environmental cost surcharge" of between €1 and €72, depending on route and cabin. The surcharge applies to flights originating within the European Union, United Kingdom, Norway and Switzerland.
Announcing the surcharge in June 2024, Lufthansa said it resulted from "steadily rising additional costs due to regulatory environmental requirements." It specified three in particular: an EU blending quota of 2 percent for alternative jet fuels, the EU's Emissions Trading System and CORSIA (Carbon Offsetting and Reduction Scheme for International Aviation).
Lufthansa's move looks likely to set a precedent among European carriers. Virgin Atlantic has said it would introduce by the end of 2025 a surcharge to cover the higher cost of alternative fuels and British Airways has indicated it may raise prices for the same reason.
Lufthansa CEO Carsten Spohr had warned back in September 2023 that the intensification of environmental compliance requirements imposed by the EU and European governments may force European carriers to increase fares and risk losing passengers to airlines in other regions.
As an example of the extra costs European airlines bear, the third-quarter results for BA and Iberia parent International Airlines Group disclosed that the costs of complying with emission trading schemes in the first nine months of 2024 amounted to €251 million.
Spohr has been especially critical of what he considers over-regulation by the German government, which, he told the newspaper Bild in October, is leading him to "worry greatly about the connectedness of the country as a business location." Eurowings is set to reduce its service in Germany by 1,000 flights per year.
A pilot licensed to fly Airbus A320 family aircraft, Spohr has worked for Lufthansa for three decades and served as CEO since 2014. He continues to oversee expansion of the group and consolidate airline ownership in Europe. In June 2024, the European Commission approved a deal for Lufthansa to take a 41 percent stake in Italian flag carrier ITA Airways for €325 million, with options to acquire the remaining shares from 2025. In September, it was reported that Lufthansa intends to acquire a 19.9 percent stake in TAP Air Portugal.