It came as a rare moment of transparency for the airline on Wednesday, when United Airlines CEO Scott Kirby told analysts and reporters that after a year of constant disruptions, including canceled and delayed flights, lost luggage and worse, passengers could expect more of it in 2023.
“The system simply cannot handle the volume today, much less the expected growth,” Kirby said. “There are a number of airlines that cannot fly their scheduled times. It is the customers who pay the price.”
The year 2022 was one of the most stress-inducing for consumer air travelers in recent times. A surge in travel demand after airlines slashed resources during the pandemic took airlines flat-footed. Unable to adequately staff flights, they still continued to sell record numbers of tickets, resulting in more than one in five flights being delayed, according to the US Bureau of Transportation Statistics – the highest delay rate since 201[ads1]4.
On Memorial Day last year, airfares rose and flight cancellations began to increase. The situation worsened over the summer, as bouts of disruptive weather left passengers stranded and forced Transport Secretary Pete Buttigieg to call a meeting of airline chief executives.
While the fall was largely free of disruptions, the year ended with a winter storm that brought flights to a standstill, particularly at Southwest Airlines.
“The days of flying and being fun are long gone,” said William McGee, senior fellow for aviation and travel at the American Economic Liberties Project, a nonprofit, nonpartisan antitrust group. “People will settle for non-event kingdoms.”
Not everyone agrees on the nature of the problem. According to Scott Mayerowitz, managing editor of The Points Guy travel website, the current system is mostly fine on any given day.
“It’s only these few cases when things go wrong, that they go horribly wrong, and it causes serious problems for such a large number of people,” he said. “And it’s terrible if you’re one of those passengers – but next week everyone goes together and the system works.”
Nevertheless, many agree on the short- and long-term challenges plaguing the industry. Airlines will soon be hampered by a lack of adequate staffing, United’s Kirby alluded to. On a more distant horizon are modernization and market reform efforts that analysts fear could be hindered by political obstacles.
Those problems are likely to persist as long as Washington gridlock prevails, analysts say.
As the pandemic hit, aviation was among the most affected industries, as more than 90% of flights were grounded. Bloomberg News estimated that around 400,000 global airline industry workers were set to lose their jobs as a result of the pandemic.
Today, there is a shortage of labor throughout the economy, but the problem extends to the airline sector, where more extensive training of employees is usually required.
“The question on everyone’s lips is, ‘Where have they all gone?'” Tim Clark, president of Emirates Airline, said at an event this summer, as reported by The Wall Street Journal. “There are hundreds of millions of people who have disappeared from the labor market.”
Foremost among the airline industry’s workforce issues is the pilot shortage. According to one estimate, around 12,000 more pilots are needed. Even before the pandemic, pilots were retiring in droves as the baby boom generation reached the federally mandated pilot age of 65.
“The pilot shortage for the industry is real and most airlines will simply not be able to realize their capacity plans because there simply aren’t enough pilots, at least not for the next five-plus years,” said United’s Kirby. a quarterly earnings call last April.
But pilot unions have resisted calls for reforms. Some fear that proposed changes could jeopardize safety. Others worry that with younger, less experienced pilots among their ranks, some leverage over collective bargaining will be lost.
On its website, the Air Line Pilots Association, the nation’s largest pilot union, calls the shortage a “myth” and accuses airline executives of trying to maximize profits — in part by refusing to reduce their routes.
But even ALPA acknowledges that more measures can be taken to “maintain a robust pilot pipeline,” such as helping students pay for flight training and subsidizing loans to cover it. Having more pilots available to work will ease the burden on the system.
Other stakeholders seem to be on the same page.
The trade group Airlines for America, which counts American Airlines, JetBlue, Southwest and others as members, told NBC News that its carriers “have worked diligently to address operational challenges within our control by hiring additional personnel and adjusting our schedules to improve reliability.”
Senator Lindsey Graham has introduced legislation to raise the pilot retirement age from 65 to 67. The bill is supported by the Regional Airline Association, which says that since 2019, 71% of airports have reduced the number of flights, and nine airports have lost service entirely as a result of the age limit.
“Under this legislation, approximately 5,000 pilots will have the opportunity to continue flying over the next two years, and in turn help keep communities connected to the air transportation system,” said association senior director Drew Remos, according to CNBC.
Outdated technology and infrastructure
It is almost universally agreed that the infrastructure underlying parts of the US air travel system is outdated and vulnerable. It was on full display at the beginning of the year when a technology problem at the Federal Aviation Administration grounded all planes. The agency said it was continuing to investigate, but Washington lawmakers said the failure proved more drastic changes were needed.
Rep. Sam Graves, R-Montana, said the incident highlighted “a tremendous vulnerability in our air transportation system.”
“Just as Southwest’s widespread disruption just a few weeks ago was inexcusable, so is the DOT’s and FAA’s failure to maintain and operate the air traffic control system,” he said.
The Southwest incident was also partly blamed on Southwest’s aging scheduling system, which requires crew members to call a central hotline to be rerouted when a disruption occurs.
The FAA has been working to implement what is known as the NextGen system to modernize the nation’s air traffic control system, some of which still use paper strips to coordinate flight routes. Reuters recently referred to this aspect as “long ridiculed”.
“There is a lot of work needed to reduce the backlog of maintenance, upgrades and replacement of buildings and equipment needed to safely operate our nation’s airspace,” FAA Deputy Administrator Bradley Mims said last April.
Delta Air Lines CEO Ed Bastian has said additional federal funding is needed to speed up modernization.
“I put this down to the fact that we’re not giving them the resources, the funding, the staffing, the tools, the technology that they need to modernize the technology system,” he recently told CNBC’s “Squawk Box.”
“Hopefully this will be the wake-up call to our political leaders in Washington that we need to do better,” Bastian added.
But Paul Hudson, president of the FlyersRights consumer advocacy group, said the transport department is already getting plenty of funding – and the money is being misused.
“I would like to see an audit of where the money is,” Hudson told NBC News. “The DOT got a huge raise and it’s either not being used or it’s being used for things other than what’s causing the cancellations.”
But even this issue comes back to staffing. The FAA said in 2020 that it was more difficult “to hire technical talent as quickly and efficiently as in the past.”
Lawmakers across the political spectrum have called for an alternative solution: privatization of the air traffic control system. It’s a step that other countries have taken, including Canada, whose NAV Canada system has been a privately run nonprofit corporation since 1996.
“It’s the gold standard for air traffic systems in the world,” said Scott Lincicome, director of general economics at the Cato Institute, a libertarian think tank. “It’s efficient, it’s innovative, and it’s a nonprofit private company regulated by the government,” Lincicome said, adding, “It’s a great example of what the American system could be if we could overcome our difficulties.”
But Lincicome said there is ingrained opposition to that solution — and to many other practicalities promoted by consumer advocates of all political stripes.
“It doesn’t seem like there’s any appetite in Washington for that reform, regardless of the documented problems,” Lincicome said. “That seems like a very tough nut to crack.”
Meanwhile, flyers in the US will remain at the mercy of their individual airlines. Already, American air passengers enjoy fewer rights than passengers in Europe, according to Eric Napoli, vice president of legal strategy at AirHelp, a European-based consumer rights advocacy group. While European passengers are entitled to as much as €600 when there is a flight disruption of more than three hours that is not beyond an airline’s control, travelers on US flights are only entitled to a refund – and even that can be hard to come by.
“It’s difficult to demand compensation from the airlines,” Napoli said of airline passengers in the United States. “They don’t have good protection.”
Mayerowitz, along with The Points Guy, said carriers are likely to pass on the costs of stronger regulation to customers.
“Americans are used to $39 flights to Florida,” Mayerowitz said. “There’s probably not a desire on the part of travelers to pay an extra $20 or $30 per ticket to have these delay protections that they may or may not reap the benefits of” if their flight ends up on time.
Airfare has been in a more or less steady decline since the mid-1990s, adjusted for inflation. Compared to a ticket that cost an average of $558 in 1995, airline tickets in 2022 cost an average of $373, according to the Bureau of Transportation Statistics.
McGee, with the American Economic Liberties Project, hopes that flying in the US will become so difficult that lawmakers can finally take more sweeping action.
“It’s coming to a breaking point, and this is not a one-party issue,” McGee said. “There is a general feeling in the country; most Americans realize that something is really wrong with this industry.”
But Mayerowitz said until those actions are taken, passengers should be realistic about what to expect when they take to the skies.
“Passengers should never lower their expectations, but should always prepare for the worst,” Mayerowitz said. “We need to hold airlines and politicians accountable. Flights should be predictable and consistent, and you shouldn’t have to wonder if air traffic control is going to work today when you go to the airport.
“That said, every traveler should always have a backup plan and a backup for their backup. And that’s especially true over the holidays.”