Lufthansa hikes fares ahead of SAF mandate

German airline Lufthansa announced that it is introducing ‘Environmental Cost Surcharge’ to pay for the rising costs on account of regulatory requirements including the higher premium on usage of sustainable aviation fuel (SAF).

The surcharge will vary between €1-72 depending on the flight routes and fares.

“These include the statutory blending quota of initially two percent for SAF for departures from EU countries from January 1, 2025, adjustments to the EU Emissions Trading System (EU ETS) as well as other regulatory environmental costs such as the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA),” said the airline in its press release.

It added that the surcharge will apply to all flights sold and operated by the Lufthansa Group departing from the 27 EU countries as well as the UK, Norway and Switzerland and will be levied on all tickets issued from June 26, 2024 and applies to departures from January 1, 2025.

The EU’s SAF blending quotas will increase from 2% in 2025, 6% in 2030, 20% in 2035 and 70% in 2050.

Lufthansa Group said that this will lead to additional costs in the billions in the future.

The airline is investing up to $250m in the procurement of SAF for the coming years and exploring long-term SAF partnerships with producers.

In 2022, the Lufthansa Group used approximately 13,000 tons of SAF, just under 0.2% of the group’s total fuel demand (7.6m tons) and about 5% of the SAF available worldwide.