The airline industry can’t take much more of this without permanent damage

Travelers are bracing for another rough holiday weekend of delayed and canceled flights.  Cancellation rates are about four times pre-pandemic levels with many travelers stranded for days.  This cannot continue much longer as there’s no point in traveling if your arrival can only be predicted in days instead of hours.

People love to travel.  Almost everyone has a dream vacation in mind, perhaps years of them planned in advance.  For me, I’m hoping to go to Paris next May to see Bruce Springsteen and then hit the south of France.  Travelers on such trips make up about 88% of airline ticket sales. Business people also need to travel, either within their own company or to meet customers and vendors.  Business travels only account for about 12% of people actually on the planes, but they are a much higher profit margin segment and contribute about 75% of total revenue on some flights.  These two groups of travelers account for about 60% of an airline’s business with the remaining 40% largely coming from partnerships to sell miles for rewards programs, which of course only works because people want to fly for either business or pleasure.  This want and need is so great that travelers have quietly accepted  an ever increasing combination of TSA screenings and airline imposed fees since 9-11, not to mention pandemic related mandates like masks.  Over the past twenty years, it seemed like people would put up with anything, from long lines to get past security to having to pay if you wanted to reserve a seat, for the privilege of convenient, on-time air travel.  The deal over the past two decades was pretty simple:  The glory days of luxury airlines with liquor and cigarettes might be gone, but just get there safely and on time.  I don’t care about the rest.

Alas, it appears the airlines themselves have now broken this agreement. The media produces a steady drumbeat of endless delays and cancellations coupled with an inability to reschedule a traveler on anything resembling a reasonable timeframe.  A simple search of “airline cancellations” yesterday revealed a litany of problems.  CNN reported on “At least 800 more flights canceled on Monday after a chaotic travel weekend.”  Yahoo News followed up with another 700 flights canceled Tuesday itself and The Washington Post looked ahead to the holiday weekend with “Flight delays and cancellations stress travelers as July 4 nears.”  The same scenario plays out almost every week these days.  Earlier this month, USA Today quoted James Ferrara, co-founder and president of the global host travel agency, InteleTravel.  “This has been another travel Armageddon weekend.  But it’s not isolated, or really a surprise,” he said.  Somehow, this is true even as overall travel is down since it’s pre-pandemic peak.  Passenger volumes this month are only 87.7% of what they were in 2019 according to the TSA, and yet Delta is approaching a 10% cancellation rate with 7% of flights canceled.  United sits at an unhealthy 3%.  Business Insider estimates the cancellation rate is four times higher on key travel weekends than before the pandemic.  As a result, complaints about airline service are on a rapid rise, up an incredible 321.5% since 2019.  Between March and April alone, complaints increased 14.8% to over 5,000 in a single month.

The airlines have been quick to blame a whole host of factors for their woes, everything from the weather to the Federal Aviation Administration.  Earlier this week, the Associated Press reported that “Airlines under scrutiny for widespread flight disruptions are renewing their criticism of the government agency that manages the nation’s airspace, saying that understaffing at the Federal Aviation Administration is ‘crippling’ traffic along the East Coast.”  In their view, “The comments from the industry group could serve as a preemptive defense in case airlines again suffer thousands of canceled and delayed flights over the holiday weekend, when travel is expected to set new pandemic-era highs.”  The industry was also widely seen to be responding to Transportation Secretary Pete Buttigieg, who recently had a flight of his own canceled and was forced to rent a car for the DC to New York drive.  “That is happening to a lot of people, and that is exactly why we are paying close attention here to what can be done and how to make sure that the airlines are delivering,” he said while pushing for the airlines to “stress test” their summer schedules, whatever that precisely means.  The government, however, is not the only group suffering from a labor shortage.  The airlines themselves are desperate for pilots between a combination of early retirement programs during the pandemic and strict vaccination requirements afterward.  The numbers are dire.  In 2021, the Federal Aviation Administration issued less than half the number of expected pilot licenses, meaning we do not appear to be even close to meeting demand anytime soon, especially when you consider that pilots require a minimum of 1,500 hours of training and captains 2,500, meaning it is at least a year before a new one is minted.  Overall, the pandemic is estimated to have reduced the number of airline workers by at least 114,000 according to the Bureau of Labor Statistics.

Casey Murray, the president of the Southwest Pilot Association union, believes the shortage is only going to get worse even though airlines are actively trying to hire people to fill the gap.  “This is going to go for the rest of the decade, and it’s only going to get worse.  And we’re seeing less and less people move into the pilot ranks at the bottom. I like to call it ‘cradle to career.’ And it’s taking longer to get there, and fewer and fewer people are entering our profession.”  In the meantime, inquiring minds would like to know how any of this is possible after the American taxpayer provided $50 billion in funding to support these very same airlines during the pandemic.  In March 2020, we understood that an industry tasked with moving people around for a living was going to need help while those same people were locked down by the government. Special funding to ensure their continued operation enjoyed broad public support.  We did, however, anticipate something resembling a return to normalcy in exchange for the funding.  Instead, we are being forced to witness the collapse of an industry we paid for, one that can be attributed directly by the failure of our government to ensure the money was spent wisely and the greed of the airlines who took the money and then retired pilots anyway with no care for the future.  Putting this another way, the money was to keep the essential airline workers employed so they could pick up where we left off, but instead they spent it on…well, precisely what we do not know.  There has been no accounting, no rationale, no reasoning, only the usual litany of excuses which we’ve all sadly come to expect in an era defined by incompetent shortages of just about everything.

Ultimately, what no one seems to realize is that this is an existential threat if ever there was one.  The travel industry is based on getting you where you want to go, reasonably close to the time you were supposed to get there, but that bargain is now being shattered beyond repair.  If you’re unfortunate enough to be on one of these canceled flights, the next available option could be several days later.  Sadly, this was starting to become a trend even before the pandemic.  I experienced it first hand coming back from a business trip to St. Louis when our Thursday afternoon flight was canceled due to a little snow in New Jersey.  The agent at the gate happily informed me that I was rescheduled for a flight on Saturday, almost 48 hours later with no seeming awareness of how disruptive that was, not to mention expensive with two nights of hotel and meals on our dime.  My colleague and I ended up flying to Detroit, then Philadelphia, and finally an Uber to Newark to make it home the next day.  This simply isn’t sustainable:  You cannot plan a vacation knowing you have somewhere around a 10% chance of arriving three days late.  Nor is your boss going to be happy if you tell him you’re coming back to work days later than planned, assuming you can afford the room and board, or even find it at a popular resort.  Business travelers, on the other hand, require timely arrivals and departures, perhaps even more so.  Many take day trips to be back in time for meetings the next day, or at the least fly out in the morning for a meeting in the afternoon.  A two to three day disruption defeats the entire purpose, and will rapidly be perceived as too risky to be worth it.  What’s the point of flying in for a meeting you are going to miss anyway or not being able to fulfill your obligations when you get back, especially in an era where you can work virtually?

There is none, and if these horror stories persist travelers of all kinds will abandon the entire effort in droves.  The business doesn’t work without an acceptable level of predictability, and there will be a tipping point past which it collapses and people spend their money on other recreational or business needs.  The airlines continue down this path at their peril, but don’t expect improvements anytime soon. They are convinced you need them and will continue to believe that until everyone votes with their wallet.


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