Airlines set to increase fares under new emission rules

The EU wants airlines to pay for their pollutants, with ticket prices set to rise up to €10 per return flight, according to the Financial Times. It said the EU had approved increases in carbon pricing, which makes airlines buy allowances to offset their pollution under the emissions trading scheme.

The FT said current rules, which allow airlines to obtain a significant proportion of permits for free, will be phased out by 2026. The total number of permits will also be reduced, driving up costs.

Ryanair last year spent €51 million on credits and said it would be unable to absorb the cost in the medium to long-term.

Deutsche Bank analyst Jaime Rowbotham told the FT that “Ryanair, easyJet and Wizz Air would spend a cumulative €785 million on carbon allowances in their 2023 fiscal years, equivalent to about €2.60 per passenger journey.”