Some airlines and airports are struggling with post-covid travel demand.
Anadolu Agency | Anadolu Agency | Getty Images
LONDON — Delays, cancellations and strikes. It has been a complicated time for many European tourist hotspots as airlines and airports struggle to cope with pent-up travel demand following Covid-19 lockdowns.
Thousands of flights have been canceled and recent travelers have queued for hours at passport control and baggage collection at airports across Europe – and the problems are set to drag on forever.
“Air travel this summer is fraught with uncertainty, both for passengers and airlines,” Laura Hoy, equity analyst at Hargreaves Lansdown, told CNBC via email.
“Long delays and cancellations are likely grating on consumers’ desire to travel as airlines make the distinction between trying to capture the post-pandemic travel boom and preparing for the likely downturn to come as economic conditions deteriorate. “
According to aeronautical data company Cirium, 400 flights were canceled at all UK airports between June 24 and June 30, representing a 158% increase on the same seven days in 2019.
And that’s outside the peak summer season – usually between July and early September in Europe.
London’s busiest airport, Heathrow, asked airlines last week to cut flights because the number of passengers was more than it could handle. Some passengers were unaware that their flight had been cancelled, while others complained about long queues.
Meanwhile, low-cost airline easyJet cut thousands of flights over the summer to minimize the risk of disorder.
Travelers also faced similar problems in the United States as they sought to leave for the July 4 weekend, with more than 12,000 flights delayed and hundreds cancelled.
And the travel chaos is unlikely to subside in the coming months, according to Stephen Furlong, senior industry analyst at wealth manager Davy.
“There will be disruptions that will continue into the summer if ATC [cargo] driven or ground handling or security personnel or airline self-inflicted labor problems,” he added.
In France, in June, a quarter of flights were canceled at the main airport in Paris due to a workers’ strike.
And more strike-induced disruptions could be on the way. British Airways is preparing for a staff strike in the coming weeks as workers demand that a 10% pay cut put in place during the pandemic be reversed. And Ryanair workers in Spain said at the weekend they would strike for 12 days in July, demanding better working conditions.
What causes the disturbance?
There are many reasons for the travel chaos and they are mostly industry wide issues, rather than a country or airline specific issue.
“The rate at which passengers have returned to the skies since the spring has surprised airlines and airports a bit too. They just don’t have the staff we would need for a full summer,” said Alexander Irving, European transportation analyst at AB Bernstein, told CNBC’s “Squawk Box Europe” last week.
Many airlines, airport operators and other businesses in the travel industry have laid off workers during the pandemic as operations come to a halt. Many of these workers sought opportunities elsewhere and did not return to the sector, while others were pushed into early retirement.
“At the end of the day, we need more staff,” Irving said.
Additionally, attracting new talent is difficult at this time given changes in the job market, such as the so-called Great Quit – when workers chose to leave their jobs, often without another line up, looking for a better professional life. balance.
Hiring new people is also a medium to long-term solution, as in many travel-related jobs there is mandatory training before workers can start their jobs.
At the same time, many of those who have remained in the sector feel underpaid and have complained about their working conditions.
That “probably means at the end of the day paying people more and treating them slightly better,” Irving said of labor issues and strikes.
At Amsterdam’s Schiphol Airport, a group of cleaners, baggage handlers and security staff will be paid an extra 5.25 euros ($5.55) an hour this summer, according to Reuters. However, the same airport has announced that it will limit its passenger volume this summer, in particular to reduce disruption.
Other countries are also scrambling to improve the situation of their airports. In Spain, police are hiring more staff at some of the country’s busiest airports and Portugal is also increasing its border control staff.
“The response of most businesses when the pandemic hit was to reduce capacity in expectation of a prolonged period of lower growth. However, the pandemic produced a different outcome: a scenario where the global economy was virtually extinguished and then reignited in a short period of time,” Roger Jones, head of equities at London & Capital, told CNBC.
He said that in addition to shortages in the job market, inflation is also a problem.
“Cost inflation, especially fuel and wages, is making it worse and making it a really difficult operating environment, which is weighing on profitability,” he said by email.
Many airlines, including British Airways and Air France-KLM, received financial support from governments during the pandemic to avoid collapse. However, a number of unions and airlines are now asking for more help from governments to support the recovery of the sector.
Despite strikes, cancellations and other disruptions, some analysts are still positive about the sector and say the recent situation has been “exaggerated”.
“I feel like it’s being overplayed by the media and the vast majority of flights are running and on time. Ryanair, for example, while operating 115% of pre-Covid capacity has anticipated this and has largely avoided disruption so far,” Davy said. Furlong said via email.