Apex collects fare data from over 160 airlines worldwide, including major US and European carriers. Fare data is collected for every flight number in a month with four capture points: 6 months before departure, 3 months, 1 month, and 1 week before. The fare collected is the lowest available non-stop economy fare.
This article aims to analyse the effect of reduced demand on average fares between Europe and the US, examining fare trends in the first quarter of 2025 and the upcoming summer season for the main carriers operating between Europe and the US.
Findings
Table 1 shows that in Q1 2024, there was a positive trend for both outbound and inbound fares to and from Europe and the US, with an average increase of 11%. The growth in fares from Europe to the US was slightly lower. However, in Q1 2025, despite the average outbound fare showing growth, there was a decline of 3 percentage points. On the other hand, the inbound fare from the US to Europe experienced a steeper decline, decreasing by 9%, causing the average fare in both directions to decline by 3%.
Table 1: % Change in Europe-US Average Fare
Q1 2025 Fare Trend by Country
Chart 1 shows the trend of average fares for the main EU to US markets. Despite a general decline in average fares from and to the EU and US in Q1 2025 compared to Q1 2024, not all markets have been affected by this decline. In fact, there has been significant growth in average fares, especially for northern European countries, with Sweden showing the highest growth at 50%.
However, this growth in some countries has not been able to counteract the overall decline. Among the markets that experienced a decline, there is a concentration of 80% of the total seats between Europe and the US, according to Apex schedules. As a result, the fare growth in markets with less capacity has not been sufficient to increase the overall average fare.
Chart 1: Average Fare Trend by Country Q1 2025 vs Q1 2024
Q1 2025 Fare Trend by Carrier
Chart 2 shows that the carriers with the highest growth in average fare are LOT and SAS, with increases of 19% and 13% respectively, matching the positive performance of their main countries of operation. They are followed by IAG, where British Airways and Aer Lingus show growths of 5% and 3% respectively, while Iberia presents a decline of -8%. This results in IAG showing an average growth of only 2%, reflecting the deeper decline in Spanish fares compared to the UK and Irish markets.
Moreover, Lufthansa Group presents a slight decrease of -1%, mainly due to ITA's steep decline of 22% in average fare. ITA is the only operator within the group with a decline, as Lufthansa, Swiss, Brussels, and Austrian show growths of 1%, 6%, 1%, and 10% respectively, mainly coinciding with the positive trends in their respective main countries of operation, except for Germany for Lufthansa.
A similar situation can be observed in the Air France-KLM Group, where KLM shows a slight growth of 1%, similar to the performance of the Netherlands, whereas Air France presents a decline of 3%, resulting in a 2% decline for the group.
For US operators, the situation is not favourable compared to their European counterparts. All four US carriers operating to and from the European market show a decline in average fare, with American Airlines experiencing the sharpest decline of 29%, leaving US carriers in a worse position compared to most European carriers.
Chart 2: Average Fare Trend by Carrier Q1 2025 vs Q1 2024
Summer Months Fare Trend by Carrier
The summer months, which include only fares collected 6 months before departure for July, August, and September, present a bleaker outlook compared to Q1 2025 according to Chart 3. This could be due to the fact that for Q1 2025, average fares included those collected before the US government inauguration in January, as well as fares collected 30 and 7 days before departure. These fares are usually higher and purchased for a more business premium market closer to the date of departure, which could have helped Q1 2025 achieve better performance.
Additionally, fares collected 6 months before departure are lower and usually purchased for a more VFR (Visiting Friends and Relatives) and leisure market. As leisure and VFR are significant components of the market during the summer season, this might be the main reason for the worsened outlook for the summer months. However, this trend could present an improvement when fares collected closer to the date of departure are added to the average fare.
Regarding the performance of the airlines, SAS continues to improve its average fare, jumping from a 13% to a 59% increase, whereas American Airlines remains at the bottom with a -33% change. Notably, JetBlue shows a 17% growth in its average fare, being the only US operator with growth in its fare during the summer months. Similarly, SAS is the only European operator with growth in its fare.
The case of JetBlue maybe since most of its European destinations experienced their first summer season in 2024. As a marketing strategy, JetBlue likely offered lower prices than its competitors to promote the new routes, resulting in summer 2024 fares being 22% lower on average compared to other operators. In 2025, the fares are only 9% lower, showing growth that almost equals the average fare of the other operators.
On the other hand, within the European carrier groups, all carriers present a decrease in their average fares unlike Q1 when some of them presented a growth on its average fare, with ITA for Lufthansa Group at -29%, Iberia for IAG at -13%, and Air France for KLM-Air France at -2%. being the airlines with higher decrease within their respective groups.
Chart 3: % Change in Average Fare for Summer Months
Conclusion
In the first quarter of 2025, US carriers were the most impacted, with the majority reporting a decline in average fares. In contrast, most European operators saw at least modest growth during the same period. However, the summer season revealed a more significant downturn, particularly among airlines within the Lufthansa Group and IAG, where all carriers experienced reductions in average fares. These trends highlight the need for continued monitoring, especially as fares booked closer to departure may help improve the overall outlook. Nonetheless, the unpredictable actions of the US government remain a key risk factor, affecting not only European but also US airline performance.
Banner image Markus Mainka via stock.adobe.com
