prices - Flights and package tours remain expensive for German customers
Customers from Germany still need to dig deep into their pockets if they want to travel by airplane. Especially European flights and all-inclusive packages have become even more expensive in the first half of 2024, according to the Statistical Federal Office. For most tourists, the price decreases of up to 15.8% for destinations in North America, South America, and Asia (minus 12.3%) do not matter, as the classic holiday destinations are mostly around the Mediterranean.
International ticket prices have averagely decreased by 3.1%, but airlines earned 2.7% more on average for flights to European countries. Destinations in Africa are 4.1% more expensive. The very high price level of 2023 was hardly left behind: Compared to the first half of 2022, all tickets on average were 20.9% more expensive.
Only Egypt is cheaper
For all-inclusive packages that mostly lead to destinations in Europe or North Africa, customers had to pay 5.2% more in the first half of 2023 than in the same period in 2022. This is an increase of 19%. The statisticians registered the largest price increase of 7.6% for trips to Turkey. The Spanish Canary Islands (+6.7%) and Balearic Islands (+6.3%), as well as Greece (+4.5%), also saw an increase. Trips to Egypt became cheaper.
The airline industry associations, such as the German Aviation Industry Association (BDL), name the increase in the ticket tax on May 1 as a significant reason for the rising prices. A BDL spokesperson says that this will not be without consequences for flight prices. The tax is imposed on each ticket between 15.53 and 70.83 euros, depending on the distance class.
Efficiency lost
In recent years, not only has the air traffic tax been increased several times. The unions in all areas of aviation on the ground and in the air have enforced strong wage increases, while the previous efficiency was not achieved. The core company Lufthansa Airlines is operating with the same crew as in 2019, but flying 20% fewer flights, complained Lufthansa CEO Carsten Spohr recently. That means 20% less efficiency.
At the airports, the costs for passenger and luggage control, as well as for the services of flight controllers on the route and during takeoff and landing, and for airport handling, have risen. The start of a medium-haul jet of the type Airbus A320 at German airports costs around 4000 euros in state taxes, complains Lufthansa. The same start in Madrid or Barcelona costs only 600 euros. All these costs must be recovered through the tickets, in addition to billion-dollar investments in new aircraft.
Germany: expensive pavement for passenger flights
The fact that Germany has become expensive pavement for passenger flights also has long-term consequences. While the seating capacity in this country has only reached about 80% of the pre-Corona level, most other European countries have already flown as much as before the pandemic. The German Aerospace Center (DLR) has analyzed the consequences. From German airports, significantly fewer destinations are being flown to than before the pandemic. Above all, the strongest European airline Ryanair is still making a large detour around the expensive Germany.
Irish carriers, like Easyjet and Wizz Air, deploy their aircraft in markets with lower entry costs because they can quickly reach their profit threshold there. Their offerings of cheap flights are growing in Italy, Spain, or Poland, while for German consumers it has significantly shrunk. Eurowings, a Lufthansa subsidiary, is the largest provider of direct flights from Germany. According to DLR research, their tickets are on average 43 Euros more expensive than Ryanair's.
Even on the previously lucrative long-haul routes, Lufthansa has fallen behind with its high costs and limited offerings. The European airline industry's largest revenue earner cut its profit forecast for the current year by roughly one third last week. "We see pressure on average earnings in all traffic segments," a spokesperson said.
Chinese Advantage
Competitors like British Airways have raised their offerings back to pre-Corona levels, a feat that still eludes the Lufthansa Group by about 15 percent. In the Asian market, Chinese airlines are expanding their flight offerings and are significantly cheaper because they do not have to fly through Russian airspace like their Western competition.
The German Travel Association confirms its forecast that prices for all-inclusive trips will only rise "moderately" in the single-digit percentage range this year. Although inflation has ebbed, it still plays a role in purchasing flights and hotel rooms, according to a spokesperson. In the first half of 2023, price increases for all-inclusive trips abroad were lower than those for flight tickets (+10 percent) by 14.9 percentage points.
Press Release Destatis Ticket Prices 1st HJ 2024Press Release Destatis Ticket Prices 1st HJ 2023Press Release Lufthansa Profit Warning from 12.07.2024DLR Low Cost Monitor
- Despite the average 3.1% decrease in international ticket prices, European flights and packages remain expensive for German travelers, particularly to destinations like Greece and the Balearic Islands.
- The airline industry association, BDL, attributes the rising prices to the increase in the ticket tax, which varies between 15.53 and 70.83 euros per ticket.
- In recent years, air traffic taxes have been increased several times, and unions in the aviation sector have enforced strong wage increases, leading to decreased efficiency.
- Lufthansa CEO Carsten Spohr noted that the company is operating with the same crew as in 2019 but flying 20% fewer flights, resulting in less efficiency.
- Although Germany's seating capacity has only reached about 80% of the pre-Corona level, most other European countries have surpassed their pre-pandemic flight numbers.
- Ryanair and other low-cost carriers like Easyjet and Wizz Air avoid expensive Germany, choosing instead to operate in markets with lower entry costs, resulting in cheaper flight offerings.
- Asian airlines, like those from China, are expanding their flight offerings and are significantly cheaper on long-haul routes due to not having to fly through Russian airspace.
- The German Travel Association predicts that all-inclusive trip prices will only increase moderately this year, but inflation still impacts purchasing flights and hotel rooms.
- In the first half of 2023, price increases for all-inclusive trips abroad were lower than those for flight tickets by 14.9 percentage points.
- Lufthansa, the European airline industry's largest revenue earner, cut its profit forecast for the current year by roughly one third due to high costs and limited offerings.
