Those economics aren’t great, and they are aggravated by the challenge carriers currently face maintaining their workforces and the jump in cancellations and delays those shortfalls are causing.
Airlines would like nothing more than to add flights to busy summer schedules. But accelerating labor shortages have forced them instead to pare back plans for summer to better reflect their ability to staff flights. Between March 16 and June 8, summer schedules — usually packed with more flights than any other time of the year — had been trimmed by 3.1%, based on data from OAG and Oliver Wyman’s PlaneStats.com app. Given the importance of summer revenue to carriers, this is the equivalent of retailers closing some of their stores around Christmas.
Since the beginning of the year, airline capacity — the measure of seats deployed and the distance they’ve flown — has been steadily slipping. By June, capacity was almost 7% lower than in June 2019, based on OAG and PlaneStats.com data. That was mostly a function of shortages of airline workers, but also staffing difficulties at Transportation Security Administration checkpoints, air traffic control and other vital airport functions, which are also contributing to flight delays. Some of this also reflects increased absenteeism because of workers getting sick with Covid.
Delays and cancellations can push up fuel consumption and costs as aircraft idle on the tarmac waiting for a spot to open up for either takeoff or deplaning. They also saddle airlines with thousands of passengers who still need to get to their destinations — a challenge made exponentially greater with restricted capacity and short staffing.
For airlines, the pressure on margins — at a time when demand has been strong, and people seem willing to pay higher prices — raises questions about what lies ahead for the industry, especially as global economies continue to slow. While higher fuel and labor costs are not expected to abate anytime soon,…