Business travel industry responds to ‘surprise’ Lufthansa green surcharge

Corporate travel professionals, industry associations and environmental groups have expressed mixed views following Lufthansa Group’s ‘surprise’ move this week to impose an ‘environmental cost surcharge’ on flights.

The European aviation giant, which also includes Austrian Airlines, Swiss, Brussels Airlines and Eurowings, on Tuesday 25 June announced an environmental surcharge of between €1 and €72 would apply to all tickets issued from 26 June 2024 for departures from 1 January 2025.

German travel buyer association VDR told BTN Europe it was “surprised by the short notice of this news”.

VDR President Christoph Carnier said: “From our point of view, early dialogue is desirable because climate protection is teamwork. We therefore recognise the need for both suppliers and customers to participate in the relevant activities and costs in order to implement sustainable solutions.

“However, in order to budget for such large cost blocks, such an adjustment should not be introduced to the market with less than a day’s notice… We will now approach Lufthansa to start the dialogue on further information.”

The fee, Lufthansa said, will help the airline group address “steadily rising additional costs due to regulatory environmental requirements”, such as the EU’s new blending quota of 2 per cent for sustainable aviation fuel (SAF) from 2025, and that the exact charge will be shown in price details on booking pages.

However, several business travel professionals on LinkedIn expressed concerns over reporting implications for corporates and exactly how the aviation group intends to ‘invest’ the added funds.

Diane Lundeen Smith, senior manager, global travel supplier programs and content at Microsoft questioned: “If the customer is paying, shouldn’t they also have ability to claim that expense against their own climate goals?”

Oli Hammer Mortensen, senior partner at Denmark-based travel consultancy AMM, also scrutinised whether the levy is “just going to pay for SAF or will the funds be used to rethink pollution and how to decrease it or just to help the bottom line?”

In a similar vein, Camille Mutrelle, SAF expert at Transport & Environment, an EU environmental group, said surcharges like this “are bound to happen” because alternatives to fossil fuels are expensive, but cautioned that “consumers deserve to know what they are chipping in for”.

“Lufthansa is mostly purchasing questionable fuels made from waste oils and fats, instead of investing in truly green fuels like e-kerosene,” Mutrelle said in a statement shared with BTN Europe.

“The surcharge announced does not provide enough clarity on the volumes and costs of SAF purchased, nor on the distribution of costs between the airline and its passengers.”

Others, however, applauded the move as a step towards a greener future.

Ben Park, executive director of travel and sustainability at clinical research organisation Parexel and newly elected GBTA board member, on LinkedIn said Lufthansa’s initiative “not only reflects a commitment to sustainability but also sets a precedent for fair competition and consistency across the industry. It’s a call to action for all EU airlines to jointly adopt similar surcharges”.

He added: “While some may see this as a “green tax,” it’s important to remember that these charges are essential for covering the costs of SAF and other environmental requirements… By 2030, with economies of scale, we hope to see a reduction in production costs and increased local subsidies for SAF production within the EU.”

Similarly, tClara founder and CEO Scott Gillespie said: “This is a much-needed baby step in the right direction”, but questioned whether the fee is being driven by regulatory requirements, as stated by Lufthansa, or by the group’s growth plans.

“I’m waiting for an airline to say: ‘We’re good with charging higher fares and reducing our emissions if we can still make a good profit’. Doing so will mean less growth, of course, and big questions about the backorder of new aircraft,” he said on LinkedIn.

Meanwhile, Patrick Diemer, chair of travel association network BT4Europe, said Lufthansa’s environmental levy “reaffirms our call for the European institutions to act swiftly and adopt a clear, consistent and robust CountEmissions proposal”.

Earlier this week, Brussels-based BT4Europe expressed “serious concerns” about the European Commission’s proposed directive for calculating offsetting requirements from flights, particularly around how emissions from business travel will be accounted for.

“If there was one consistent and transparency methodology for measuring and charging for emissions everyone would know that they are paying their fair share of the costs for decarbonising aviation,” Diemer said. “There would be no need for announcements from individual airlines. The industry has a common objective: greener business travel.”