Package holiday prices for summer 2025 were already forecast to be up 4.2% (£50pp), on average, compared with last year, back in January, according to Which. However, President Trump’s tariffs, on pause for now, are likely to come into force just in time to increase the price of your summer holiday.
They will hike the costs for nearly every firm involved in flying passengers to their getaways. Aviation is far too global a business, reliant on intricate supply chains that crisscross borders, for the impacts on margins not to be felt.
Consider the Boeing 787. Parts like wings, fuselage sections, and engines are sourced from countries such as Japan, Italy, the UK, and others. Any tariffs will force the cost of this jet up. The same will be true of the Airbus A320 and Boeing 737, the workhorses of leisure travel, especially given the proposed 25 per cent tariff on aluminium and steel, as both materials are used to manufacture planes.
Engine manufacturers will likewise be impacted. GE Aerospace’s chief, Larry Culp, calls for reintroducing the tariff-free regime for the aerospace industry under the 1979 Agreement on Trade in Civil Aircraft.
Meanwhile, Airbus and Boeing have struggled to deliver new jets like the Neo and the Max for the last few years, so the value of second-hand aircraft has increased due to a supply/demand imbalance.
While there are reports that Trump is planning to spare carmakers from some of his most onerous tariffs, even if second-hand aircraft are deemed exempt from tariffs—like used cars will potentially be—the value of these jets for operations or parts for maintenance will only increase as airlines and other firms look to mitigate their tariff exposure as much as possible.
So, with costs rising, ticket prices will increase. It’s basic economics. Prices in 2024 were already at an all-time high in some markets, and all indications are that there is enough travel demand for airlines to hike prices and pass these costs on. For example, Eurocontrol, Europe’s air navigation safety body that manages its airspace, says it will see 5.2 per cent more flights this summer.
Equally, according to research this year by the European Travel Commission, most on the continent have been planning longer and higher-budget holidays despite a slight drop in overall intent to travel.
The European Travel Commission found that one-third of Europeans plan to spend €1,501–€2,500 per trip, while nearly one in five are considering paying over €2,500.
So, at least this summer, there is enough intent to spend on most, if not all, tariff costs, which carriers will pass on.
This summer had been anticipated to be when the cost of a holiday would drop from its post-COVID highs. With a glut of new hotel rooms set to come onto the market, prices were set to tumble. But the planned tariff regime looks set to delay that.
There may be a silver lining on the horizon, though. If transatlantic travel continues to decline, carriers like BA or Virgin Atlantic may pivot towards more flights in Europe next year, increasing competition and therefore starting a price war for summer 2026.
By Gediminas Ziemelis – Chairman of the Board of Avia Solutions Group
About the author:
Gediminas Ziemelis (GZ) (born April 4, 1977) is an accomplished Lithuanian-born entrepreneur and business visionary living in Dubai. He is the founder and Chairman of the Board of Avia Solutions Group, the world’s largest ACMI (Aircraft, Crew, Maintenance, and Insurance) provider, operating a fleet of 220 aircraft.
The Irish-based group covers 17 aerospace business segments and comprises a 15,000-strong team across more than 70 countries. It provides a wide range of aviation services, including aircraft maintenance, repair, and overhaul (MRO); pilot and crew training; ground handling; cargo and corporate aviation charters; and many more. In 2023, the group generated more than $3 billion in revenue.
Gediminas is known for his cosmopolitan mindset and exceptional management skills, contributing to his success in various business fields. Over the past 27 years, he has founded over 100 start-ups, 50% still in operation. He has also led companies through four successful IPO/SPO processes and raised over €1 billion in global public capital markets. His family office, Ziemelis Holding, has invested in various online marketplaces, fintech companies, luxury interior and furniture manufacturers, food producers, and other ventures.
In 2024, TOP Magazine listed Gediminas Ziemelis as the richest Lithuanian, with estimated assets worth €2.8 billion.
He is the largest shareholder in the basketball club Wolves, known for having one of the best club infrastructures in the EU. In 2023, the philanthropist became a sponsor of the Rashid Centre for People of Determination in Dubai.
