After demand for travel during the European summer season resulted in fares in the EU soaring by 20-30% compared with 2019, the EU has said it will launch an investigation to understand the reasons behind the significant increases along with the inner workings of the industry.
Adina Valean, the EU’s Transport Commissioner, told FT.com that officials were looking into “what is exactly going on in the market and why… We are still investigating because we don’t have a full, detailed explanation,” she said.
In June, Iata announced that it had revised its initial forecasts for global airline profits in 2023, saying they would more than double to US$10 billion (R185 billion) on the back of post-pandemic demand for travel. Major players such as IAG, Air France-KLM, and Lufthansa have already reported record profits, while ACI Europe says nearly half of Europe’s airports have already exceeded their pre-pandemic passenger volumes.
However, there is concern that demand is outstripping existing resources to ensure sufficient inventory, with many airlines reporting that they are facing several supply constraints – from aircraft to fuel and staff shortages. While EU law allows airlines to dictate the cost of airfares, Valean worries that this could hinder connectivity.
“We are in a permanent conversation with the industry to understand what the cause of this development is,” she said.
