Published on
August 26, 2025
Malta is experiencing a historic surge in airfare prices, with costs soaring by forty-six percent in 2025. This unprecedented rise is primarily driven by the post-pandemic tourism boom, where travel demand has outpaced the capacity of airlines to meet it. As inbound tourism continues to grow at a rapid pace, airlines are struggling to keep up, resulting in significant inflationary pressure on airfare prices. This sharp increase not only sets Malta apart from other European countries but also presents challenges for travelers, with airfares now playing a major role in the country’s overall inflation rate. The situation is expected to ease by 2027, with inflation projected to return to its long-term average of around three percent.
Airfares in Malta have soared to unprecedented heights, with the cost of air passenger transport rising by a staggering 46% in April 2025 compared to the same month in 2024. This sharp increase is primarily attributed to a booming post-pandemic tourism industry, which has pushed passenger numbers to exceed pre-2019 levels. Unfortunately, the available seat capacity has struggled to keep up with the surge in demand, creating a supply-demand imbalance that has significantly contributed to the price hike.
A recent report from the Central Bank of Malta (CBM), featured in the Outlook for the Maltese Economy, reveals that the growing disparity between supply and demand, along with escalating fuel and operational expenses, has led to one of the most significant airfare hikes in Europe. The surge in airfares far surpasses Malta’s historical average inflation rate of 3.1%, with airfare prices continuing to rise at an alarming pace—42% in May and 25% in June. These ongoing increases indicate that the price trend is not just a one-off, but a persistent issue.
In contrast, inflation for air passenger transport in the euro area was reported at 14% in April 2025, illustrating how Malta’s airfare price spike has been not only more significant but also prolonged. Other tourism-heavy nations, including Greece and Spain, also experienced steep increases in airfare prices, but unlike Malta, their inflation rates began to normalise earlier in the year. This prolonged spike in Malta sets it apart from many other countries facing similar challenges.
Airfare prices have become a significant driver of overall inflation in Malta. In April 2025, the surge in airfares contributed 0.6 percentage points to the total inflation rate, accounting for around a third of the services-driven inflation. The Central Bank of Malta highlights that this price escalation stems from a combination of strong demand and supply-side constraints. The tourism sector, which suffered a dramatic collapse during the pandemic, has rebounded sharply. Since early 2023, inbound and outbound flights have consistently exceeded 2019 levels. In fact, inbound tourism has grown by an impressive 38% on average since 2024, outpacing Greece’s growth of 26%. Passenger movements in 2025 have averaged 42% above 2019 levels, which has placed immense pressure on the available seat capacity.
Despite an increase in seat availability—up 17% over 2019 levels in 2024 and 35% higher in 2025—capacity has not been able to meet the soaring demand. A key example of this imbalance is seen in February 2025, when passenger movements were up by 56% compared to February 2019, while seat capacity had risen by only 47%. This gap between demand and supply has been a significant factor in the dramatic increase in airfares.
In addition to the supply-demand mismatch, airlines continue to face higher operational costs. A major contributing factor is the price of jet fuel. During the 2022 energy crisis, crude oil prices peaked at \$125 per barrel, which led to a sharp increase in jet fuel prices. While Brent crude oil prices have since decreased, the cost of jet fuel remains elevated, and broader increases in airline expenses have only added to the financial strain. In 2024, jet fuel prices were down by 12% compared to the previous year, but they are still high compared to pre-pandemic levels.
Looking ahead, the Central Bank of Malta forecasts that airfare inflation will remain elevated through the first half of 2026 before gradually easing. This easing is expected to be driven by falling crude oil prices, which are anticipated to stabilise ticket prices. Additionally, a slowdown in the pace of demand growth could further help reduce inflationary pressures. Airfare inflation is expected to return to its long-term average of approximately 3% by 2027.However, other factors are expected to influence this trend, potentially prolonging the high price levels.
One such factor is the European Union’s Emissions Trading System for aviation. By 2026, the system will phase out free allowances for airlines, which will result in higher costs for the sector as part of efforts to combat climate change. Airlines will face increased financial burdens as they are forced to purchase emission allowances, which could drive up operational costs and, in turn, impact airfare prices.
Another significant challenge for airlines is the growing cost of Sustainable Aviation Fuels (SAF). SAF, which is considered a cleaner alternative to traditional jet fuel, was priced at 3.1 times the cost of conventional jet fuel in 2024. It is expected to rise to 4.2 times the cost in 2025, making it an even more expensive option. SAF production is currently limited, which adds further pressure to the already strained airline sector. This increase in fuel costs, coupled with ongoing high demand, could slow the return to more typical airfare price levels, further complicating the situation.
Malta is facing an unprecedented forty-six percent increase in airfare prices in 2025, driven by soaring post-pandemic travel demand and limited airline capacity. This surge is significantly impacting the economy, with airfares now a major contributor to the country’s inflation.
The combination of strong post-pandemic tourism recovery, an imbalance between supply and demand, high operational costs, and external factors like emission regulations and the rising cost of alternative fuels presents a challenging outlook for airfares in Malta. While the Central Bank of Malta projects a gradual easing of airfare inflation by 2027, it is clear that the recovery in air travel prices will be a slow and complex process. Passengers and the airline industry alike will need to navigate these challenges in the coming years, as the pressures on airfares continue to shape Malta’s economic landscape.
