Recent research commissioned by the environmental advocacy group T&E has challenged the notion that aviation demand is primarily driven by location-based costs and taxes. The study examined passenger volume data from 101 European airports in 2024 and found only a weak link between costs and demand, even for airports with high expenses, such as Heathrow Airport.
Marte van der Graaf, an aviation officer at T&E, commented that airlines often blame taxes for declining passenger numbers as part of a campaign to advocate for tax cuts. The report highlights that airline supply decisions, business models, and travel trends play a more critical role in shaping demand. Notably, historical data from Germany indicated that despite a doubling of jet fuel prices since 2000, passenger numbers increased by 75% by 2019, suggesting demand is less sensitive to price fluctuations.
Impact of COVID-19 and Travel Trends
The study also points to demographic and behavioral shifts, with a significant decrease in business travel and a growing preference for leisure trips. Business travel by major corporations declined by 34% from 2019 to 2023, while travel to southern European holiday destinations increased by 10-20% in 2025 compared to 2019. These trends have contributed to changes in overall passenger demand, overshadowing the influence of taxes and fees.
“Airlines are trying to tell an easy story by blaming location costs for decreased demand. But this is just a campaign to cut taxes and fees. Demand for flying is not such a simple numbers game. Strategic decisions by airlines, trends in travel behaviour, and airline business models influence passenger numbers, rather than costs alone,”
The report recommends that national governments focus on maintaining levies that reflect externalities like climate impact. Van der Graaf states that lowering aviation taxes would result in a loss of public revenue without effectively increasing demand. Instead, taxation should be applied more meaningfully, such as higher taxes on long-haul flights and premium tickets, to fund sustainable aviation efforts.
