The price of flying will keep rising, even on Ryanair

The emptiest aircraft on which I ever flew was an All Nippon Airways flight from Tokyo to London in June 2020 amid the pandemic. It was a Boeing 777-300 with about 250 passenger seats, of which four were filled: in airline lingo, it had a load factor of less than 2 per cent.

We crossed continents like a ghost flight, the attendants devotedly sticking to their usual in-flight routines and walking by the empty rows of seats to confirm that nothing was amiss. Flight ANA-211 was a fragile link between Japan and the UK in the days when many passenger flights stopped: I booked at the last minute and the tickets were memorably cheap.

Flights are now much fuller, and fares higher. When I returned to Japan earlier this year, direct fares had doubled in price and I connected in Hong Kong to economise. The same is true of short-haul flights as people book up eagerly for summer holidays: Ryanair, now Europe’s biggest airline, this week reported strong bookings, and easyJet has done the same.

With stronger demand and higher jet fuel costs have come stiffer prices. Ryanair carried 16mn passengers in April — more than the same month in 2019 — and its aircraft were 94 per cent full. Its fares have risen by 10 per cent on pre-Covid levels and the carrier’s famous €9.99 fares (before paying for bags and better seats) are a fading memory.

Airlines are notoriously cyclical and prone to losing money: the industry collectively lost $138bn in the annus horribilis of 2020, when I took the ghost flight to London. Even in good times, margins are tight. Prices have fallen in real terms for decades because they keep on buying new aircraft (Ryanair has ordered up to 300 737-Max 10s from Boeing) and trying to fill them.

Despite this, I believe the industry’s warnings that we will have to pay more to fly: “We are in an entirely different world where air fares are rising,” one executive told the FT this week. Michael O’Leary, Ryanair’s chief executive, may keep squeezing rivals with his motto that “lowest cost wins” but it will not feel like that for the customer.

With restrictions lifted, people want to fly again: “Short-haul flying has roared back to life because of pent-up demand,” says Frankie O’Connell, reader in air transport at the University of Surrey. They must contend with fewer, stronger carriers: Ryanair’s flights were about 80 per cent full a decade ago, but seats are now scarcer.

Not only can such airlines charge more; they will soon have to. The industry faces a vast technological challenge in meeting its self-imposed target of reaching net zero carbon emissions by 2050. It is impossible to do so on the current flight path, given that aviation accounts for about 2.5 per cent of global emissions, and moving to another one will be extremely expensive.

Ryanair exemplifies the traditional approach: keep on growing but try to curb the environmental impact by replacing old aircraft with modern twin-engined jets that burn less fuel. It promised this week that people switching to its flights from other airlines could cut their emissions by up to 50 per cent because of what it dubs its “game-changer” fleet of newer 737s.

Well, up to a point. It is true that such aircraft help by reducing emissions per passenger, but it is slow going. The last of Ryanair’s new Boeings is due to be delivered in 2033, only 17 years before the net zero target, and efficiency can only partly mitigate growth. Some 10bn passenger journeys are expected in 2050, five times the volume of 2021.

There is little chance of turning to electric or hydrogen-powered aviation soon: Airbus intends to fly a zero-emissions hydrogen plane by 2035 but it would take €300bn of investment to build the infrastructure in Europe alone, one study found this week. Even then, taxes on jet fuel would be needed to make hydrogen flight competitive.

The best medium-term bet is sustainable aviation fuel, made from waste oils, fats and non-food crops. The industry is counting on SAF for two-thirds of the contribution to achieving its net zero target. But it will be hard and costly to produce enough: Dave Calhoun, Boeing chief executive, warns that biofuels will “never achieve the price of jet fuel”.

There is an iron logic to all this: flying is going to be expensive. I regret it, in many ways. Aviation is marvellous for taking holidays in interesting places and exploring the world, despite crowded airports and cramped seats. But flyers have not borne the full environmental price, even with carbon offsets, so something has to give.

Prices can be powerful, as the growth in flying encouraged by low cost carriers shows. The French government has decreed a ban on domestic flights of less than two and half hours between cities well connected by trains. France is an outlier but higher fares could have a similar impact elsewhere in squeezing short-haul flight, where there is a decent alternative.

For my part, I am going to Amsterdam next week by train. The Dutch government has been blocked by a court from curbing flights to Schiphol airport, and it would have been cheaper to fly. One day, it may not be.

john.gapper@ft.com