FINNAIR, the flag carrier of Finland, admits that flight prices will increase as a consequence of tougher climate measures.
“As CEO Topi Manner has said, the era of cheap flight tickets is over,” Eveliina Huurre, the director of sustainability at Finnair, confirmed in an interview with Helsingin Sanomat on Thursday. “Rising costs will increase pressure to raise flight ticket prices.”
Manner, who is set to take over as chief executive of Elisa by March, stated to the newspaper last summer that reducing carbon dioxide emissions from air travel will require a lot of money and investment.
“Ultimately the costs will be transferred to flight ticket prices,” he said.
The European Union began reducing the number of free emission allowances distributed to airlines at the beginning of this year, with a view to scrapping the allowances almost completely in 2026, reminded Helsingin Sanomat. Finnair’s costs from emission trading will consequently surge from around 38 million euros in 2023 to 100 million euros in 2026, according to an estimate by the central government.
“It’s a lot,” Huurre said to Helsingin Sanomat. “Aviation is a business of small margins, after all.”
The operating costs will be pushed up by the sustainable aviation fuel regulation of the EU. The regulation obligates large airports to distribute a predetermined share of sustainable aviation fuels such as certified biofuels, which are presently about three to five times more expensive than fossil kerosene, according to Huurre.
Finnair, she said, is currently monitoring the production of biofuels almost on a daily basis.
“We hope that the production of sustainable aviation fuels increases significantly, but so far nothing like that is on the horizon.”
The emission trading costs of the airline will likely to continue to rise beyond 2026 because, at the end of the year, the emission trading scheme could be expanded to apply to all flights departing from the economic area of the EU.
Aleksi Teivainen – HT