European airlines are expected to feel the greatest financial impact of increasingly tight emissions laws.
Sustainable Aviation Fuel mandates, carbon trading systems, offsetting and greenhouse gas reduction schemes are set to drive major cost increases for flight operators and passengers over the next decade. Often considered leaders in climate, air pollution and decarbonisation measures, the EU and UK are likely to be amongst the worst impacted in terms of rising prices for seats.
According to BloombergNEF, which conducted the research, major European airline groups are expected to bear the brunt, although low cost carrier Ryanair — currently the largest passenger airline on the continent in terms of seats sold — has also been flagged as at significant risk. Breaking down the numbers, operating costs for the company will leap by 38% over the 10 years to 2035.
Without adjusting pricing, this would see the available seat-per-kilometer margin in US dollars fall to -1.5C. Outside Europe, Emirates and Korean Air are also cited as facing significant financial pressure in the near-terms due to compliance requirements. Meanwhile, overall global airline compliance costs will rocket by 256% during the same period of time.
A number of measures are likely in response, not least hitting passengers with higher priced tickets and increasing there proportion of premium seats available per flight. Capacity overall, including the number and frequency of routes, may also be a trend. Others point to the potential for airlines to move their hubs outside of the most expensive jurisdictions, a decision which would raise overall carbon emissions if distances and journey times increase.
Image: Stefan Fluck / Unsplash
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