Air France-KLM Raises Fares to Fund Shift to Sustainable Fuels
(Bloomberg) -- Air France-KLM will apply a surcharge to its tickets prices to help fund the extra cost of using sustainable aviation fuel, going beyond voluntary measures that have so far prevailed in the industry.
The move will add between 1 and 12 euros ($1.1-$13.6) to the cost of a flight depending on the distance traveled and the class, according to a statement Monday, the first day the extra charges will apply.
“In the absence of industrial production, the cost of using sustainable aviation fuels is four to eight times higher than that of fossil fuels,” Air France-KLM said, adding that the fee will apply to flights at both its French and Dutch arms.
Airlines are turning to SAF to shrink their carbon footprints in the decade or more before hybrid, electric and hydrogen-powered jetliners become widely available. At the same time the fuel, which requires feedstocks such as algae and cooking oil or synthetic processing methods, remains in short supply.
Air France-KLM faces an additional challenge after making commitments to government shareholders on lowering emissions after being propped up by a series of pandemic-related bailouts.
Rivals like British Airways and United Airlines Holdings Inc. last year unveiled plans for extra contributions for the use of alternative fuels, but stopped short of introducing systemwide surcharges on all tickets.
Air France and KLM will lift coach-class prices by between 1 euro and 4 euros and business fares by 1.5 euros to 12 euros, according to the statement. Low-cost arm Transavia will include an unitemized contribution in is ticket cost.
Group wide, SAF will make up 0.5% to 1% of total fuel volumes this year, the company said. The goal is to reach 5% of the total in 2030 and 63% by 2050.
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