German airlines face rising costs amid EU sustainable fuel push

German airlines, particularly Lufthansa and Condor, are grappling with escalating operational costs attributed to increased taxes and fees, which have surged from 3.5 billion euros to 7 billion euros annually over the past four years. This financial strain is compounded by a growing trend of international airlines bypassing German airports, resulting in diminished global connectivity for the country. Condor's CEO, Peter Gerber, highlighted that Germany's recovery rate in air traffic stands at 82% compared to pre-pandemic levels in 2019, while other European nations have surpassed this figure. The European Union's RefuelEU aviation initiative mandates that airlines departing from the EU must utilize a minimum of 2% sustainable aviation fuel (SAF) by 2025, escalating to 70% by 2050. Lufthansa's Chief Human Resources Officer, Michael Niggemann, criticized these state mandates, arguing that they create competitive disadvantages for EU airlines against non-European hubs, as the regulations only account for departures within the EU. Lufthansa has expressed concerns regarding the anticipated shortfall in SAF production, predicting that it will become a significant cost burden for airlines. The company also contends that the EU and German government’s targets for synthetic, electricity-produced fuels are unrealistic and unattainable. The overarching aim of the RefuelEU initiative is to reduce CO2 emissions in the aviation sector, aligning with the EU's broader Green Deal climate policy. However, the combination of rising costs and regulatory pressures poses a serious challenge for German airlines, potentially impacting their competitiveness in the global market.