Following a summer of surge demand and serious delays, airlines are under increasing pressure to offer customers both a smoother service and greater guarantees going forward. As summer vacation comes to an end, what will fall bring for the aviation industry?
The upcoming months are potentially crucial for the future of the regulatory environment surrounding passenger compensation and carrier responsibility. Providers are coming under increased pressure from the Department of Transport to compensate for disruptions such as those experienced by many passengers over the summer. Having received 5,862 consumer complaints in June, three times more than in the same period in 2019, the department has launched a "dashboard" that outlines the public pledges made by airlines to compensate their passengers. Delta Air Lines, for example, have issued $6 billion in refunds since 2020, totalling 11 million tickets, whilst depositing 10,000 miles in frequent flyer accounts as compensation for delays between May 1and July 7 of this year.
Even so, pressure is growing to further empower the Federal Aviation Administration (FAA) to enforce consumer protection laws. With the laws that govern the FAA coming under review in 2023, 38 state attorneys have called on Congressional leaders to act and voiced concern over the Transportation Department's enforcement of existing regulations.
In recognition of the logistical challenges of post-pandemic air travel, schedules are being reduced throughout the fall period to mitigate for ongoing staff shortages and other difficulties. Delta is set to suspend its flights between JFK Airport, New York and Lagos in order to fit "the current demand environment". Whilst American Airlines have cut 16% of their activity in November, totalling 31,000 flights.
These reduced schedules are intended to prevent disruption going forward, with airlines committed to a smoother service that’s more in-line with present capacity expectations. Talking to CNN Travel, Kathleen Bangs, spokesperson for FlightAware, emphasised that a pre-emptive reduction in the fall schedule can "hopefully keep delays down and cancellations minimized for everybody if the schedules are pared back a little bit realistically. That's probably a good thing."
It is estimated that 400,000 airline workers were fired, furloughed, or told they may lose their jobs between the start of the pandemic and February 2021. Carriers like Southwest and Delta negotiated employee buyout agreements and early retirement packages to avoid involuntary redundancies, but a mass exodus from the industry has left airlines playing catch up across the board.
Some issues persist: Delta pilots alone were forced to miss 19,985 days due to sickness in May, up 45% from 2019 levels. But airlines are re-hiring in large numbers to compensate for the shortfall. By the end of 2022, JetBlue, for example, will have hired over half their employees within the last two years whilst many, including United, American Airlines, and Delta, are hiring approximately 200 pilots a month in order to drive efforts to return to pre-pandemic capacity.
In spite of the numerous operational difficulties , economic prospects for the airline industry are looking up. IAG, owners of British Airways, Aer Lingus, and three other airlines, are back in the black for the first time in four years – posting operating profits of £245 million in the second quarter compared to a £809 million loss this time last year – whilst Qantas bosses believe the worst economic impacts of the pandemic are behind them.
Further, summer disruption does not appear to have significantly dampened passenger demand in the US. According to a recent survey “more than 40 percent of American travelers will travel more than seven hours and nearly half (49 percent) plan to travel by plane.” Indeed, a memo from Cowen investment bank on airline capacity insists that “despite these issues, the demand environment has never looked stronger, and there is continued confidence that consumer led demand will continue into the fall.”
Business travel is seen as vital to post-pandemic recovery in the industry. While the Global Business Travel Association predicts that corporate travel will not fully return to 2019 levels until mid-2026 (eighteen months later than previously forecast) business travel in the fall is expected to be higher than at the start of this year. The value of corporate travel to the industry has halved in two consecutive years but is still expected to be worth $933 billion in 2022.
The road to post-pandemic recovery remains long, but as we move into fall there is quiet optimism in the industry. Airlines are hiring again, and in large numbers, modest profits are returning, and while regulatory pressure is growing from Congress there is hope that a properly managed schedule can bring smooth air travel back across the country.