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Staff shortages disrupt airlines as summer travel season takes off

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Don’t expect the flight cancellations and delays that plagued the 4th of July weekend to end anytime soon.

Ravi Sarathy, a professor of international business and strategy at Northeastern University, says cancellations, delays and escalating flight costs are likely to get worse before they get better. Labor shortages and bad weather will continue to create turmoil in the industry, he says.

“Until they fix the staffing shortages, it’s probably not going to get better,” Sarathy says.

Northeastern Professor of International Business and Strategy Ravi Sarathy poses for a portrait. Photo by Alyssa Stone/Northeastern University

There were more than 2,000 domestic flight cancellations over the July 4 weekend. By July 5, nearly 600 more were canceled and about 5,500 were delayed, according to FlightAware, a company that tracks the airline industry. The disruptions continued for the rest of the week, with around 300 cancellations and 5,000 delays each day.

So far this year, the cancellation rate has been around 3%, says FlightAware spokeswoman Kathleen Bangs. By comparison, she says, the cancellation rate in 2019 was less than 2%, but rose to 12% in 2020 during the pandemic.

The high volume of summer flights has placed a huge burden on airlines, which have cut staff, planes and flights during the COVID-19 pandemic. Like many industries, airlines also face inflation issues, including fuel costs which have more than doubled over the past year.

“Many airline staff, from baggage handlers to pilots, have taken buyouts, furloughs and layoffs during the pandemic, as airline load factors hit 20% to 30% and planes halfway. empty ones were losing money,” says Sarathy.

Employment in the airline industry has rebounded since the pandemic, but numbers still lag behind pre-pandemic totals.

In February 2020, passenger airline employment peaked at 458,200 jobs, according to Airlines for America, an airline trade association and lobby group. The low point of the pandemic was in November 2020 at 364,500 jobs. In April this year, the total rose to 445,600, still below pre-pandemic figures.

Bangs says staffing shortages are the reason for recent delays and cancellations. She says the onboarding process for new employees is slow due to background checks and training.

“Travel demand has come back skyrocketing, but it’s like turning around on a battleship,” she says.

Pilots who took a buyout or early retirement during the pandemic would have to start at the bottom of the seniority list if they wanted to return, Bangs says, which may deter returning to work.

“I think they had a harder time attracting people than they thought,” Bangs says.

Airlines have also taken many planes out of service during the pandemic as they cut routes with such low demand. Now, says Sarathy, they are struggling to resupply their fleets. It takes two to three years to get a new passenger plane delivered, and with just two plane makers – Boeing and Airbus – airlines cannot meet current demand. Bringing back decommissioned planes isn’t always cost-effective, he says.

In December 2019, before the pandemic, there were 5,780 passenger planes in service, according to Airlines for America. As of December 2020, the industry had 4,671 aircraft. The industry began to increase the number of planes and services in 2021, ending the year with 5,427 planes. At the end of June this year, there were 5,570 aircraft in service.

Another contributing factor to this perfect storm in the industry is the weather. The erratic summer weather has caused an increase in delays and cancellations, Sarathy says, and these regional weather issues are having a cascading effect across the country.

“I think it should improve in the fall,” Sarathy says, as demand for summer vacations will decline and a possible recession could reduce consumer spending on airfare.

“As we approach fall and schools reopen, people return to work after the holidays, the influx of traffic should slow down, allowing for better route planning and fewer cancellations,” Sarathy says.

Airline ticket prices are already falling for flights in the fall, Bangs points out.

But the weather itself isn’t the problem, says Bangs. There haven’t been more weather events this year, but when there is a delay due to weather, airlines don’t have the staff to adapt and reschedule.

“They just don’t have the manpower to deal with these weather events,” she says.

The strong demand has caused an increase in the price of air tickets. The industry suffered major losses for a few years during the COVID-19 pandemic, Sarathy says, and now airlines are trying to recover.

“Because demand is up, prices are going up,” says Bangs. “Part of that is the cost of fuel; it will always be the case.

Airlines, like so many industries, are being greatly affected by the rising cost of fuel. Jet fuel prices averaged $4.21 in June this year, up 122% from $1.90 in June 2021, according to Airlines for America.

“As airlines add more planes and more flights, I think prices will come down,” Sarathy says.

US airlines are expected to post modest profits in 2022, according to Airlines for America, and the companies will use those profits to pay off the huge debt accumulated in 2020-21 to deal with the pandemic. The organization says the airline industry’s debt – and interest charges – will remain high until at least 2024.

The pre-pandemic pre-tax profit margin for airlines was 9.6% from 2017 to 2019; however, in 2021 the industry was in the red at -2.6%.

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