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Airline Chaos Makes High Fares Harder to Bear

Airline Chaos Makes High Fares Harder to Bear

Saturday, 11 June, 2022 - 05:30

The summer travel season is picking up — and so are the airport horror stories.

Long lines, delays and cancellations have been particularly rampant in the UK, Europe and Canada in recent weeks, but the US has certainly seen its fair share of travel blowups. So far this year, about 20% of the flights from US carriers have been delayed by an average of 48 minutes, according to data from FlightAware. That’s up from 12% of flights during the same stretch last year and about 16% in 2019. US carriers canceled more than 2,500 flights over the busy Memorial Day travel period, FlightAware data show. A substantial portion of those came from Delta Air Lines Inc., which warned of cutbacks just days before the holiday weekend started and said it would cull 100 flights a day between July 1 and Aug. 7 to improve operational reliability.

Return to the Skies

Delta is far from the only airline struggling to align its flying capabilities with a resurgence in demand. Covid continues to fuel increased absences among an already thin staff. There simply aren’t enough pilots to go around. There are fewer planes than airlines would like, too, because Boeing Co. is struggling to deliver 737 Max jets amid supply chain challenges and is prevented from handing over 787 Dreamliners while the Federal Aviation Administration reviews changes to its production processes. That leaves a thin cushion to absorb unavoidable disruptions such as weather. The preemptive cuts to flying schedules are an attempt to ensure more customers will actually get from point A to point B. The large US carriers were targeting about 91% of their pre-pandemic capacity for the second quarter as of the end of May, down from 105% as of late January, according to an analysis from Cowen & Co. analyst Helane Becker. Even with the efforts to rebalance their schedules, it’s likely to be a “disastrous summer” for airline travel, Becker said this week in an interview with Bloomberg TV.

There’s been plenty of hand-wringing about the impact that ticket price inflation might have on consumers’ willingness to travel. Data released Friday from the Bureau of Labor Statistics showed airline fares continued to climb in May after surging by the most on record in April. Ticket prices have now topped the previous peaks of 2013 and 2014 on a seasonally adjusted basis. Airline executives are unanimous in insisting there’s been no measurable effect on bookings. If anything, the opposite is true: Demand for airline travel is “amazingly strong” and is reaching “levels I’ve never seen in my entire career,” Alaska Air Group Inc. Chief Executive Officer Ben Minicucci, who has worked in the industry for about 25 years, said in a separate interview with Bloomberg TV this week. This makes sense: After several years when travel was complicated, if not rendered completely impossible, by Covid restrictions and consumers dumped barrels of money on physical goods, people are eager to splurge on vacations instead — for now.

Pricey Flights

What’s perhaps less appreciated is the extent to which airport hassle could prove to be the airlines’ Achilles’ heel. Splashing out on a getaway is all well and good when it feels glamorous and fun; it’s significantly less appealing when your direct flight is canceled, you’re rebooked in a middle seat at the back of the plane with two connections and then spend several hours sitting on the runway waiting to take off.

Airline travel nightmares are nothing new, of course. While Covid disruptions have brought fresh labor and supply challenges, at least a portion of consumers’ frustration seems to reflect amnesia about how annoying it was to fly anywhere before the pandemic. But of the many predictions about how Covid would change everyday behaviors, the few that have seemed to stick involve a realization that it’s not actually necessary to put up with an array of inconveniences that were previously considered just a fact of life. Commuting to the office five days a week is one example. Dealing with airports could be another.

There are plenty of places that are impossible to get to in any kind of reasonable vacation-oriented time frame without an airplane, so many consumers will simply suck it up and deal with the more demoralizing aspects of travel. But there is a precedent for hassles turning off would-be fliers: Passengers’ frustration with the flying experience resulted in an estimated 38 million avoided domestic plane trips in 2013, according to data extracted from a survey conducted by ResearchNow for the U.S. Travel Association and published in 2014. Travelers’ No. 1 concern when flying was delays and cancellations, followed by fees imposed by airlines for checked bags and seat assignments. The trade group hasn’t reconducted the survey since 2014, a spokesperson said.

It’s also worth noting that demand for private jets has remained incredibly robust even as concerns about Covid have faded somewhat and investors start to fret about the prospect of a recession. May was the 12th consecutive month of record-breaking global activity for business jets, with about 22% more flight activity than in the same month in 2019, according to data from WingX. It seems unlikely that this continued demand for flying private is taking place in a vacuum. A popular refrain in the industry is that once people fly private, they aren’t eager to go back to the headaches of commercial air travel. Recurring headlines about airport nightmares may only deepen their resolve.

The airlines seem newly aware of the risks in returning to pre-pandemic habits of treating passengers as if they should be grateful for the opportunity to pay gobs of money for whatever flying experience the carriers feel like giving them on that particular day. For one, the US taxpayer played a significant role in keeping the airline industry afloat during the pandemic through more than $50 billion in payroll aid. It’s a bit rude and awkward to heap travel-day indignities on your financial backers. Onerous change fees haven’t yet made a broad reappearance, thankfully, and there’s a general push to bring comfort back to coach class. United Airlines Holdings Inc. is overhauling its mainline, single-aisle jets with in-flight entertainment for every seat, better Wi-Fi connections and enough overhead bin space for each passenger to carry on a roller bag. Southwest Airlines Co. is also investing in faster internet, more free movies, USB chargers and larger overhead bins.

Some of the causes of recent travel disruptions are outside of the airlines’ control, including short-staffed airports, air-traffic control headaches and bad weather. But the industry would be foolish to think passengers’ willingness to pay increasing fares will hold up indefinitely if chaos continues to reign at the airports.


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