Airfares to Malta set to rise by €10 as airlines face higher EU emissions costs

Flights to and from Malta are expected to get more expensive because of rising costs from the European Union’s Emissions Trading System (ETS). 

Ticket prices could go up by about €10.10 per passenger if the cost of CO2 emissions is €80 per metric tonne. The price could go up by as much as €13.92 per passenger if the ETS cost rises to €110 per metric tonne of CO2.  
This emerges from a Central Bank discussion paper authored by senior economist Kurt Sant.  

The report considered ticket price adjustments if airlines passed on these costs entirely to passengers. However, it did not factor in additional cost pressures such as increased aviation fuel taxes or the mandatory adoption of Sustainable Aviation Fuel (SAF), which was considerably more expensive than conventional jet fuel. 

The report revealed that scheduled passenger flights to and from Malta International Airport in 2024 consumed a staggering 351,977,437kg of fuel. This corresponds to 1,112,248 metric tonnes of CO2 emissions. 
This means that the annual emissions from aviation fuel are equivalent to the annual emissions of 856,000 petrol-driven cars. This calculation, made by MaltaToday, is based on EU average emissions of 1.3 metric tonnes of CO2 per car per year. It would take roughly 18 million trees growing for 10 years to absorb this amount of CO2. 

The cost of cutting emissions 

By 2026, airlines will no longer receive free ETS allowances and will be required to purchase them in full, in line with the EU’s polluter-pays principle. This change will significantly raise operational costs for carriers, particularly those serving smaller and highly seasonal routes like those to and from Malta. 

The EU’s Fit for 55 initiatives, which aim to cut greenhouse gas emissions by at least 55% by 2030 compared to 1990 levels, are driving regulatory changes in the aviation sector. The RefuelEU Aviation mandate will gradually require airlines to use more Sustainable Aviation Fuel (SAF), which will make fuel costs higher. Although the Single European Sky initiative is expected to help airlines save time and improve efficiency by better managing airspace, smaller airlines will still face challenges due to the overall rules and regulations. 

Efficiency measures by the new national airline 

The analysis also considered measures taken to enhance the efficiency of KM Malta Airlines, which replaced Air Malta as the country’s flag carrier. The new airline inherited a fleet of six Airbus A320neo aircraft from Air Malta, along with two older Airbus A320 models, which have since been replaced by additional A320neo aircraft. By the end of 2024, KM Malta Airlines will have modernised its fleet entirely, operating eight Airbus A320neo planes. 

The shift to a fully A320neo fleet partly offsets rising operational costs and environmental obligations. The A320neo offers up to 20% better fuel efficiency than its predecessor and significantly reduces noise levels. The investment in a more fuel-efficient fleet has allowed KM Malta Airlines to cut emissions and fuel consumption, achieving a reduction of 36,367 metric tonnes of CO2 emissions in 2024 alone. If the airline had exclusively operated older A320 models, fuel consumption would have been significantly higher, resulting in additional emissions and costs. 

The airline’s fleet renewal is also expected to yield financial benefits in the context of ETS changes. In a scenario where all flights were operated using older aircraft, KM Malta Airlines would have faced an ETS cost of nearly €23 million at an allowance price of €80 per metric tonne of CO2.  

However, due to its transition to the A320neo, the airline has managed to reduce this expense to under €20 million. A complete shift to an all-A320neo fleet, including wet-leased flights, would further lower ETS-related costs to below €19 million, generating an additional €1 million in savings. 

Total carbon footprint of aviation 

The Central Bank report also estimated the total emissions of all flights operating to and from Malta at 1.24 million metric tonnes of CO2. Passenger flights, which accounted for 85% of total flights, were responsible for 1.1 million metric tonnes of CO2. 
Cargo flights accounted for the highest emissions among non-scheduled services, releasing 44.8 million kilograms of CO2, closely followed by other commercial aircraft flights, which produced 44.5 million kilograms of CO2.  

Business jets contributed 25.3 million kilograms of CO2 emissions. Flights operated by military air forces emitted 3.2 million kilograms of CO2. Moreover, VIP flights, often used by state officials or prominent individuals, contributed 2.8 million kilograms. 
Finally, air ambulance flights and government aircraft flights produced 0.2 million kilograms and 0.1 million kilograms of CO2 emissions, respectively.