Why the German aviation market is broken

Key Concepts

Aviation Market Performance: Germany's aviation market lagging behind pre-pandemic levels.
Airport Fees & Taxes: High fees and taxes in Germany compared to other European countries.
Ryanair's Perspective: Ryanair CEO Michael O'Leary's criticism of German aviation policies.
Lufthansa's Position: Lufthansa also expressing concerns about high costs in Germany.
Airport Perspective: Berlin Airport CEO Aletta Von Massenbach's defense of airport fees.
Air Traffic Control (ATC) Perspective: ATC's argument that fees increase when flight numbers decrease.
Government's Role: The potential for government intervention to lower costs and boost aviation.
Low-Cost Strategy: Ryanair's business model and its challenges in a high-cost environment.
Competition: Competition from state-owned railway company Deutsche Bahn.

Main Argument: Ryanair CEO Michael O'Leary claims Germany's "Skyhigh" fees are crippling the aviation market, forcing airlines to raise ticket prices or cancel routes.
Specifics: O'Leary accuses German airports of "rapacious taxation of air travel."
Proposed Solutions: Scrap environmental taxes, lower ATC fees, and make Germany an attractive destination again.
Level Playing Field: O'Leary argues that Lufthansa is heavily subsidized, creating an uneven playing field. Ryanair wants to expand in regional airports but cannot due to high taxes and fees.
Growth Proposal: Ryanair proposed to the government to double in size over 5 years from 16 to 32 million passengers, opening more bases at German regional airports, but the government didn't reply.
Quote: "You cannot have this kind of uh rapacious taxation of air travel and see anything other than traffic declines." - Michael O'Leary

CEO: Aletta Von Massenbach, CEO of Berlin Airport.
Response to Ryanair: Von Massenbach states that Berlin Airport is "very cost conscious" and operates at a cost level acceptable to clients.
Fee Structure: She claims that Berlin Airport's charges are "very normal" compared to other airports in Germany and Europe.
Government Awareness: Von Massenbach expresses confidence that the German government is becoming more aware of the importance of air connectivity for economic development and citizens' ability to travel.

Argument: The company in charge of controlling the majority of German airspace argues that the narrative from airlines claiming that fewer flights occur because fees are too high is incorrect.
Fee Calculation: ATC states that fees increase when fewer flights occur, and decrease when more flights occur.
Equation: More flights = lower fees; Fewer flights = higher fees.

Cost Comparison: Lufthansa CEO Carsten Spohr has suggested the airline could cut German routes due to high costs.
Example: A typical A320 flight from Frankfurt costs over €4,400 in fees, compared to just €500 from Istanbul.
Cost Breakdown: These fees include tax, security charges, and air traffic control fees.

Low-Cost Airlines in Europe: Low-cost airlines have seen market share increase by 2% over pre-pandemic levels in Europe as a whole.
Low-Cost Airlines in Germany: In Germany, the same airlines' business is 30% below 2019 figures.
Berlin Airport Passenger Numbers: Berlin Airport exceeded its passenger goal in 2024 with over 25 million passengers, but that's still below pre-COVID numbers.

Transport Ministry Statement: Germany's transport ministry says location costs have risen at almost all European locations due to external factors such as inflation, labor shortages, and rising wages.
Unfavorable Conditions: Apart from high costs, Germany faces weak economic development and strong competition from the state-owned railway company Deutsche Bahn.
Competition: High-frequency services provided by Deutsche Bahn make it less attractive for airlines to serve the German market, especially the domestic market.

Complex Issue: The issue of high aviation costs in Germany is complex, with airlines, airports, and ATC all pointing fingers at each other.
Ryanair's Strategy: Ryanair's low-cost strategy faces challenges in Germany's high-cost business environment.
Political Solution: The solution appears to be a political one, requiring the government to cut taxes or invest in lowering costs.
Uncertainty: Whether the political will exists to address these issues remains uncertain.