Virgin Atlantic is the latest carrier flagging the rollout of a ‘green tax’ on airfares, with the environmental levy – a response to the rising costs of alternative fuels – expected to come into effect over the next 18 months.
It follows Lufthansa, Swiss and other members of Lufthansa Group, which recently added a passenger surcharge of up to €72 (AU$115) across all flights from the European Union, the UK, Norway and Switzerland from January 1, 2025.
Speaking with The Telegraph, Virgin Atlantic chief Shai Weiss says, “Prices will have to go up to account for the fact that flying with Saf in greater and greater volumes is materially more expensive.”
Though Virgin’s fee is yet to be revealed, Weiss has previously suggested it could be as high as £40 per flight. By comparison, Lufthansa Group’s surcharge varies from €1 to €72, depending on both the route and travel class.
For example, a short one-way hop between Munich and London sees a €2 surcharge on economy class tickets and €3 in business class, while longer trips such as Frankfurt to New York stand at €27 on a one-way business class and €54 in first class.
Lufthansa says the ‘environmental cost surcharge’ has been made necessary by EU-mandated measures such as a ‘statutory blending quota’ for sustainable aviation fuel (SAF) for departures from European Union countries from January 2025.
And those costs could increase as the years roll on.
The EU’s “mandatory SAF blending quota” requires that 2% of all jet fuel should contain sustainable aviation fuel from 2025, notching up to 6% from 2030, then jumping to 20% from 2035 and 70% from 2050.
The UK’s own mandate requires a minimum of 2% from 2025, rising to 10% from 2030.
With Virgin Atlantic now joining the movement, it’s expected more airlines across Europe and the United Kingdom could follow suit in passing on this legislated cost to passengers.
Many airlines around the world – including British Airways, Cathay Pacific, Singapore Airlines and Qantas – have set a target of operating 5-10% of flights using sustainable aviation fuel by 2030, in order to reduce overall emissions to 25% of 2019 levels.
This is considered a milestone on the ambitious path to ‘net zero emissions’ by 2050 – a measure which airline industry body IATA estimates will be largely based on the use of sustainable aviation fuel, along with the adoption of electric and hydrogen engines plus “offsets and carbon capture”.
It’s not just airlines looking at the figures either. Sweden and France have already introduced minimum SAF requirements, while Singapore is also mandating a levy on all departing flights from 2026, when a minimum of 1% SAF use takes effect.
As with Lufthansa, Singapore’s fee will vary based on the flight distance and travel class.
By Chris Ashton,
Source ExecutiveTraveller
