Cost of flying set to soar in 2025, say Luxair and industry experts

Airline fares are set to soar in the coming year, Luxembourg’s national airline Luxair and industry representatives have said.

The International Air Transport Association (IATA) is estimating that over five billion passengers will take to the skies in 2025, setting a new record. However, it remains likely that travellers will have to dig deeper into their pockets to do so.

The IATA said it expects flight prices to rise, as a result of increased costs for wages, materials, air traffic control and security checks.

“The entire aviation industry is expected to face cost increases at all levels, including fuel and operating costs, which may impact final prices,” a spokesperson for Luxair told the Luxemburger Wort.

Luxair said it is evaluating all pricing structures to offer affordable travel options “without neglecting high standards.” The airline is referring to practices such as setting fares below actual operating costs and airport fees, “which ultimately harm the industry and its stakeholders”, it said in its statement.

In Germany, the fee cap for security checks at airports will increase from €10 to €15 from January. “Arrivals and departures will become significantly more expensive,” said Jens Bischof, the head of the German Aviation Association (BDL). There is additionally a risk of a significant increase in the costs of air traffic control, said Bischof, who is also CEO of the airline Eurowings.

On the one hand, the industry is under price pressure because it has little influence over many factors: for example, airport fees and air traffic control services, but also on suppliers such as engine and machine manufacturers, some of whom exploit their monopoly position and dictate high prices.

Pressure also comes from travellers due to strong competition: every passenger can compare prices at any time and on any route, which can make passing on price increases difficult.

Airlines are estimated to make an average net profit per passenger of $6.40 (€6.09) this year, down from $7.90 last year (€7.52), according to the IATA. This profit is expected to increase across the globe in 2025, rising to an average of $9.20 (€8.76) per passenger in Europe.

Despite the predicted price rises, Luxembourg Airport is also expected to set a new record for passenger numbers, with five million travellers expected to pass through the airport this year, up from 4.4 million in 2019.

(This article was originally published by the Luxemburger Wort. Translation and editing by John Monaghan)