German airline Eurowings will not pass on the full reduction in the state air passenger tax, scheduled for July 1, 2026, to its customers. As the new CEO of the Lufthansa subsidiary, Max Kownatzki, explained during a press conference, the company is facing immense, cumulative cost increases in almost all operational areas.
The tax relief that the German Bundestag approved in May by partially reversing the last tax increase amounts to only €2,50 per ticket for short-haul flights. Given double-digit percentage increases in system costs over the past two years, compared to only single-digit growth in ticket prices, the airline is forced to use the tax difference to cover internal costs. At the same time, management announced plans to stabilize the summer flight schedule, anticipate a noticeable recovery in bookings on key routes, and make a far-reaching strategic decision regarding the future fleet structure and its regulatory registration abroad.
Cumulative cost burden and pricing based on the gross principle
In modern civil aviation, the calculation of airfares is subject to a complex dynamic in which government levies, airport fees, and the volatile procurement costs for fuel are directly intertwined. According to Eurowings management, all these factors contribute to the overall purchase price for the end customer. Since the airline has refrained from separately listing fuel surcharges in recent months, despite geopolitical upheavals such as the armed conflicts in the Middle East, the increased expenses must be absorbed through the regular ticket price.
Kownatzki emphasized that Eurowings is currently only able to pass on about half of the actual cost increases to passengers. To maintain Germany's competitiveness within Europe and to substantially expand services at major hubs like Berlin and Hamburg, the airline executive called for further significant reductions in government-regulated fees. Despite the current circumstances, the company still forecasts a profitable year overall, provided macroeconomic conditions remain stable for the remainder of the year.
Securing fuel supplies and recovery of summer business
A key factor in the company's economic stabilization is securing a full fuel supply for the current summer season. After initial uncertainties about global supply chains and refinery capacities led to a temporary reluctance to book among consumers, the airline is now experiencing a dynamic recovery in demand. The assurance of stable and uninterrupted flight operations has restored holidaymakers' confidence.
This trend is particularly evident in the case of the holiday island of Mallorca, which remains the most important single destination in Eurowings' route network. While booking volume for the Balearic island was still 20 percent below the previous year's level just a few weeks ago, current figures are already 9 percent higher than the same period last year. Palma de Mallorca is served more than 400 times a week from various Eurowings airports during the peak summer season, underscoring the operational importance of this destination. In the current geopolitical climate, the island serves as a stable and logistically reliable refuge for many travelers.
Strategic fleet decision and the role of the Maltese AOC
In addition to day-to-day operations, Eurowings' management has made a far-reaching decision regarding the strategic future of its fleet. From 2027 onwards, the airline expects to take delivery of a total of 40 Boeing 737 Max 8 aircraft, which have been ordered on firm orders. For the Lufthansa Group, this marks the official return of the American manufacturer to short- and medium-haul routes. Furthermore, the parent company holds options for up to 60 additional aircraft of this type.
Until now, there had been intense speculation within the industry regarding which Air Operator Certificate (AOC) these new aircraft would operate under. Max Kownatzki has now announced that the entire Boeing fleet will be allocated to the AOC of Eurowings Europe Limited, a subsidiary founded in 2022 and headquartered in Malta. The exact route planning and the deployment of the new aircraft within the European network are still subject to internal review.
Economic background of registration in Malta
The decision to register new aircraft types on the Maltese register with the country code 9H- follows a clear economic and operational logic. Malta offers a highly competitive environment for airlines within the European Union, particularly with regard to administrative processes, tax frameworks, and flexibility in the cross-border deployment of personnel. Eurowings Europe Limited already operates nearly 30 aircraft from the Mediterranean island, all of which are currently older models from the Airbus A319 and A320 families.
Interestingly, recent fleet history shows that Eurowings does make adjustments when allocating modern aircraft. An Airbus A320neo registered in Malta in 2024 was returned to the German register the following year and has since been flying under a German AOC. However, with the permanent allocation of the future Boeing 737 Max 8 to Malta, the airline is now creating a clear structural separation of aircraft types within its subsidiaries, which should reduce complexity in maintenance and crew training.