There was a time in the not so distant past when airlines would slap on “fuel surcharges” any time the price of jet fuel spiked. What was worse, those unpopular levies often lingered even after the cost of oil dropped. The term fell out of favor a little more than 10 years ago after U.S. regulators said that carriers had to explain how they arrived at the specific fee for fuel surcharges, or any other fee that wasn’t directly imposed by the government. Most airlines simply chose to drop the label.
Fast forward to 2024: Airline “green fares” or fees that are tied to use of sustainable aviation fuel (SAF), a more environmentally friendly jet fuel made from cooking oil, are catching on, at least across the pond. That’s in part due to moves by some nations to require carriers to lower their carbon footprint. And while this time, such fees might appeal to some fliers concerned about air travel’s contribution to climate change, in the end it’s the same result: We’re being asked to pay more to cover the cost of powering our flights.
“Airlines see government mandates, international pressure, and in some cases their own lobbying to forestall regulation, as leading to requirements for non–fossil fuel energy,” said travel expert Gary Leff, who pens the View from the Wing blog. But prices are set by supply and demand, he said, “So labeling part of the price as a ‘green fee’ is largely a marketing ploy.”
The latest levy comes from Virgin Atlantic, which recently outlined plans to charge passengers a green fee on certain flights to cover the expense of transitioning to SAF. The airline says it will phase in the charges over the next 18 months and expects to have it in place systemwide by 2030.
“Prices will have to go up to account for the fact that flying with SAF in greater and greater volumes is materially more expensive,” Shai Weiss, Virgin CEO, explained to the media regarding the airline’s move. It’s estimated that the cost of SAF is triple the amount that airlines pay for kerosene, the form of jet fuel most carriers currently use. This past fall, Virgin brought attention to the issue when it operated the first-ever commercial transatlantic fully SAF-fueled flight. Virgin didn’t say how much fliers would pay for the new green surcharge, but media reports have suggested that it could be as high as 40 British pounds a ticket, or around US$52 based on current conversion rates.
And the pressure to decarbonize air travel is ramping up. The International Air Transport Association (IATA) has set a goal of reaching zero-carbon emissions by 2050. Most major international airlines say they are committed to reaching that goal, but thus far they’ve avoided having to directly charge their customers for any related green initiatives, with a few exceptions.
One is the Lufthansa Group, which in 2023 rolled out green fares, which are an optional fare type booked separately, not an add-on to an existing booking. Recently the company said that more than 1 million passengers had already booked these fares. Still, that accounts for just 3 percent of total passengers that fly with the group, which also includes the airlines Austrian, Brussels, and Swiss. The airline group expanded the fares to select long-distance flights last November.
Donald Bunkenburg, senior director of sales for the central U.S. at Lufthansa, told Afar that the green fares are in part being driven by a European Union mandate that aviation fuel pumped at EU airports must contain at least 2 percent SAF by 2025, increasing every few years until it reaches 70 percent by 2050. But he says it goes beyond doing the minimum required by law. “There were individual passengers that wanted to somehow contribute to our sustainability efforts, for the purchase of SAF and [other] environmental projects.”
In line with the EU requirement, the German carrier also recently unveiled plans for SAF-related fees on flights within Europe, which would be mandatory. The carrier said a surcharge of up to 72 euros per ticket (or around US$80) would depend on the length of the flight and ticket price and would go into effect on January 1, 2025.
And Air France has already imposed a “SAF contribution” levy starting at 4 euros in economy class, for flights departing from France.
Some European lines have branded fares like Scandinavian airline SAS’s optional “bio” fares that effectively let consumers purchase a supply of SAF to be dedicated to their flight—and it mainly applies to domestic and European flights. Part of the issue is that European governments are pushing a more aggressive timetable than those of the IATA or the European Union. The British government, for example, is requiring that 10 percent of all jet fuel on flights departing the country must be SAF by 2030.
Other airlines have instead chosen to give passengers the choice of paying for carbon offsets, which is a more popular option in the USA. Of course, airlines, like many other industries, have been accused of “greenwashing,” or simply giving lip service to their climate efforts, resulting in growing cynicism about whether any new or added fees would actually be going toward combating climate change.
Airlines are also facing another broader problem: green fatigue. In fact, several studies have found evidence of a backlash against corporate sustainability programs when they involve added fees for customers. Some businesses are now so reluctant to talk about it that there’s a new catchphrase: “greenhushing.”
Given that it’s an election year, whether green air fares will be implemented in the United States is a bit in limbo. Says View from the Wing’s Leff: “In the U.S., airlines would like to see federal subsidies for cleaner fuels,” and, he adds, “The outcome of the election may influence this.”
