Lufthansa CEO Warns SAF Mandate will Push up Fares

Lufthansa CEO Carsten Spohr has warned that European airlines may be forced to increase fares and risk losing traffic to non-EU carriers because of the new mandate for the use of sustainable aviation fuel.

The EU last week took a huge step toward introducing minimum SAF fueling requirements, known as ReFuelEU Aviation, which will apply from 2025—starting at an initial 2 percent blending mix and then increasing over the years to ultimately reach 70 percent by 2050.

But Spohr said that while the approach on SAF was right “in principle,” European airlines could lose out because the EU’s regulations were not “competition-neutral.”

“Currently, the mandatory blending quotas only apply within Europe, including feeder flights to our hubs,” said Spohr.

“Non-European airlines are not required to fill up with the sustainable—but expensive—fuel at their hubs. This will make tickets from European airlines more expensive because no airline can compensate for the additional cost.”

Spohr’s comments were included in a pre-released copy of a speech he is due to give at Lufthansa’s annual general meeting next week.

He added that higher prices to pay for SAF would “increase the likelihood” that passengers would choose to use connections outside Europe because of lower airfares, even if that journey involved detours.

“Ultimately, this means that in their current form, these EU regulations only lead to a shift in carbon emissions,” said Spohr. “At the same time, it would be like a subsidy programme for airlines outside Europe, which—on top of everything else—have significantly worse environmental and social standards.

“Unfair climate protection regulations put European airlines at a disadvantage. In doing so, they are harming not only us but also the climate.”

Spohr added that help was needed on this issue from politicians in Brussels, Berlin and other European capitals.

Lufthansa’s CEO also revealed that currently only 3 percent of the group’s passengers took advantage of sustainability initiatives, such as making flights carbon-neutral and its recently introduced “green” fares.

Spohr said the group’s carbon-neutral platform, which allows passengers to pay for sustainable fuel, was “still used by too few passengers” after being launched more than three years ago.

“The additional cost of carbon-neutral kerosene deters many. For a flight across the North Atlantic, the surcharge adds up to around €400—not everyone can or wants to afford that,” he added.

Originally published by BTN Europe.