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By Bjorn Fehrm

Feb. 16, 2023, © Leeham News: Last week, we looked at the ticket price influence if airline fuel costs would increase going forward, either through increased use of Sustainable Aviation Fuel, SAF, or higher environmental emission fees.

We realized that ticket prices have other parts than fuel and aircraft-related costs. For instance, an airline has sales and marketing, administration, and airport ground staff. We got an overview of such cost parts depending on whether the airline was a mainline carrier or a Low-Cost Carrier (LCC).

Now we use this knowledge and our airliner performance and cost model to check the influence of varying fuel and emission costs on ticket prices going forward.

Figure 1. Jet fuel price variation over time. Source: IATA Jet Fuel Price Monitor.

Summary:

• We check the influence of SAF blends and EU emission permits on end-of-decade energy costs.
• Then we discuss how increased flight energy costs can influence ticket pricing.