2023-06-03 07:00:15
The prices of flights from France have been experiencing double-digit inflation for more than a year. And it’s not finished. Enough to reach a psychological threshold that will make you give up air travel?
This is an inflation never seen. Last April, plane ticket prices rose once more by more than 20% year on year, a surge that began in 2022 with inflation on oil, and therefore kerosene, due to the war in Ukraine. For the moment, nothing seems to be stopping this dynamic, which has also been fueled by the depreciation of the euro once morest the dollar.
“Air fares are now significantly higher than those observed pre-COVID crisis and around 10% higher than they were in 2017”, confirms Pascal de Izaguirre, president of FNAM, the National Federation of aviation and its trades.
Worse, this dynamic might be further accentuated in the coming months and years. Here are the reasons.
The cost of decarbonization is being felt
As we know, the decarbonization ambitions of the sector, which represents 2 to 3% of CO2 emissions worldwide, are high. The aim is to achieve carbon neutrality by 2050 through two main levers, which are the renewal of fleets and the massive use of so-called clean or sustainable fuels, SAFs (Sustainable Aviation Fuels).
More and more aviation players now believe that this deadline will not be met. But one thing is certain, they are aware of the overall cost of this transformation. At European level, the bill might rise to 800 billion euros, according to a German study carried out by YouGov.
For France, “the additional cost of the ecological transition of the aviation sector for the French flag (excluding fleet investment) is estimated at 1 billion euros in 2025 and nearly 3 billion euros by 2030”, specifies the president of the Fnam.
Renewing the fleet: 1 billion euros per year for Air France
The new generation devices clearly bring a gain in terms of carbon emissions with a drop of -20 to -25% compared to the previous generation.
The big companies are currently multiplying the mega-orders but this has a very significant cost, a cost which will be passed on in one way or another to the price of the tickets.
“For Air France, it is an investment of one billion euros per year”, reveals Anne Rigail, general manager of the company, during the annual congress of the Fnam.
Clean fuels, a priority at a golden price
This is the quickest lever to put in place since current aircraft can carry up to 50% SAF (which in theory makes it possible to reduce emissions by 80%).
Problem, these fuels are still very expensive: 30% more than kerosene, in particular because the French and European sector is poorly organized and not massified. “THE game changerthese are the SAF, provided that the prices do not bring us to our knees”, asserts Anne Rigail.
However, Air France aims to board 10% of SAF in its planes in 2030 once morest 1% today, a higher threshold than required by the European Union. But this will have a price.
“1% of SAF is 100 million euros for the company, 10% is 1 billion euros. On a Paris-New York at 20% of SAF, the ticket will increase by 175 euros. That will not go unnoticed,” says Anne Rigail.
It should be remembered that SAF, highly subsidized in the United States, is sold for 20,000 euros per ton once morest 50,000 in France. For the equation to be tenable, the players in the air sector are demanding that the public authorities take matters into their own hands.
“Our device is not enough incentive. Either it is the taxpayer or it is the customer who will pay”, explains Damien Cazé, director general of the DGAC, the direction of civil aviation.
“We try to give signals to producers,” adds the leader of Air France. Still, the company must now massively import these clean fuels. “But we think it will be difficult to meet our ambitions just like our European competitors. We need real public policies to develop the sector, especially since everyone is aligned with this priority and this technology”, she regrets.
Still more taxes
A plane ticket issued in France is heavily taxed. We can mention various fees as well as the 200 million euros per year generated by the eco-contribution implemented in 2020 (known as the “Chirac tax”).
And to finance the 100 billion euro rail plan, “a contribution on first class and business class tickets” has clearly been mentioned by the government.
Ecological associations are also pleading for a taxation of kerosene which for the moment escapes any puncture.
Obviously, this perspective is rather unwelcome. “Our request to the public authorities is clear. The FNAM is committed to a stabilized regulatory, fiscal and operating framework allowing the aviation sector to secure the financial means necessary for its decarbonization”, underlines Pascal de Izaguirre who also mentions the issue of competitive equality with non-European companies.
Will the plane be reserved for an elite?
In the end, it is a certain economic model that is today called into question by the imperatives of decarbonization and the evolution of the tax framework. The risk, no longer being able to make the middle classes fly, frightened by too high prices that go beyond a certain psychological threshold.
“We must be clear, decarbonization will lead to an increase in the price of plane tickets, believes Pascal de Izaguirre, and we must not have any illusions, it will lower demand”.
“Air transport must continue to benefit the greatest number”, continues the president of the federation who is also boss of the company Corsair. “To return to an elite is to go towards the weakening of our industry.”
However, for some specialists, it is indeed the decrease in traffic that will make it possible to amplify the decarbonization of the sector.
A prospect that horrifies Jean-François Rial, CEO of Voyageurs du Monde: “Degrowth is not human. It’s like communism. It’s wonderful but it never worked. The people of China, Sri Lanka or New York will never want to. We can decree it but it will never happen”.
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