Even after last year’s price shock, package holidays and European flights have continued to rise in price. This is partly due to domestic reasons, but is less significant for long-distance travel.
Customers from Germany will still have to dig deep into their pockets if they want to travel by plane. European flights and package tours in particular have become more expensive again in the first half of 2024, as the Federal Statistical Office reports. For most tourists, the price drops of up to 15.8 percent recorded at the same time for North, South and Central America and Asia (minus 12.3 percent) are not significant, as the classic holiday destinations are around the Mediterranean.
Although international ticket prices have fallen by an average of 3.1 percent, airlines charged an average of 2.7 percent more for flights to other European countries than a year ago. Destinations in Africa have also become 4.1 percent more expensive. In any case, the very high price level from 2023 has hardly been left behind: Compared to the first half of 2022, all tickets were on average 20.9 percent more expensive.
Only Egypt has become cheaper
For package tours, which mostly lead to destinations in Europe or North Africa, guests had to pay 5.2 percent more than in the first half of 2023. Compared to 2022, this is an increase of 19 percent. The statisticians recorded the largest price increase of 7.6 percent for trips to Turkey. The Spanish islands of the Canary Islands (+6.7 percent) and the Balearic Islands (+6.3 percent) as well as Greece (+4.5 percent) also increased. Trips to Egypt became cheaper.
The associations of the aviation industry and tourism industry first cite the increase in ticket tax on May 1 as an important reason for the increased prices. This will not be without consequences for flight prices, says a spokesman for the Federal Association of the German Aviation Industry (BDL). Depending on the distance class, every ticket has since been subject to a tax of between 15.53 and 70.83 euros.
Efficiency lost
In recent years, it is not just the air transport tax that has been increased several times. After the Corona pandemic, the unions pushed through strong salary increases in all areas of air transport on the ground and in the air, while at the same time the previous level of efficiency was not achieved. The core company Lufthansa Airlines is operating around 20 percent fewer flights with the same team as in 2019, CEO Carsten Spohr recently complained. That means 20 percent less efficiency.
At the same time, the costs for passenger and baggage checks at airports have risen, as have the services of air traffic controllers on the route, during take-off and landing, and for handling at airports. When a medium-haul Airbus A320 jet takes off at German airports, around 4,000 euros in state taxes are due, complains Lufthansa. The same take-off in Madrid or Barcelona is only charged 600 euros. All of these costs have to be recouped through the tickets, and there are also billions of euros invested in new aircraft.
Germany is an expensive place
The fact that Germany has become an expensive place for passenger flights also has long-term effects. While the number of seats available in this country has only reached around 80 percent of the pre-coronavirus level, most other European countries have long since returned to flying levels they did before the pandemic. The German Aerospace Center (DLR) has analyzed the consequences. Overall, significantly fewer destinations are being served from German airports than before the pandemic. In particular, Ryanair, the European airline with the most passengers, continues to steer clear of expensive Germany.
The Irish airline, like its competitors Easyjet and Wizz Air, use their aircraft in markets with lower entry costs because they can reach their break-even point more quickly there. Their range of flights with cheap tickets is growing in Italy, Spain and Poland, while it has shrunk significantly for consumers in Germany. The beneficiary is the Lufthansa subsidiary Eurowings, the largest provider of direct flights from Germany. According to a DLR study, their tickets are on average a good 43 euros more expensive than Ryanair’s.
Even on long-haul routes, which were so lucrative until recently, Lufthansa has fallen behind due to its high costs and still limited supply. Last week, Europe’s largest airline group cut its profit forecast for the current year by around a third. Pressure on average revenues is being seen in all traffic areas, says a spokesperson.
Chinese with price advantages
Competitors such as British Airways have increased their offerings back to pre-coronavirus levels, although the Lufthansa Group is still around 15 percent short of that. Chinese airlines in particular are expanding their flight offerings to Asia and are far cheaper because they do not have to fly around Russian airspace like their western competitors.
When it comes to package tours, the German Travel Association sees its forecast confirmed that prices are only likely to rise “moderately” in the single-digit percentage range this year. Inflation has weakened, but continues to play a role in the purchase of flights and hotel rooms, says an association spokesman. In the first half of 2023, price increases for package tours abroad were also 10 percent higher, which was lower than for airline tickets (+24.9 percent).
Destatis announcement ticket prices 1st half of 2024 Destatis announcement ticket prices 1st half of 2023 Lufthansa announcement profit warning of 12 July 2024 DLR Low Cost Monitor
Source: Stern
