4 min read

Aviation Industry Updates: June 21, 2022

 

Travel Disruption To Spill Into First Quarter of 2023

  • A recent disruption in travel caused by a “disconnect” between supply and demand could spill into the first quarter of next year, the head of a global airline association has warned as the industry faces a labour shortage.

  • The director general of the International Air Transport Association (IATA), Willie Walsh, on Monday said the industry was rebuilding its networks after the coronavirus pandemic led to border shutdowns and airlines laying off thousands of workers.
  • “The evidence that we have today suggests that we will still have a disconnect between supply and demand going into the fourth quarter and even potentially into the first quarter as airlines and airports rebuild for the strong recovery that we’re seeing,” he told media in Doha at IATA’s annual meeting of more than 100 airline leaders.
  • Walsh said he had been speaking to airline chiefs with some adjusting their flight schedules due to the labour shortage.

South China Morning Post

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‘The system is rusty’: Executives Defend Industry As Airlines Cancel Scores Of Flights

KEY POINTS:

  • Air travel is roaring back, but not without some significant hiccups.
  • Particularly in North America and Europe, travelers have described chaos at airports, with scores of flights canceled or delayed, luggage lost and wait times to board planes exceeding four hours. That’s partly the result of labor shortages from the pandemic, as layoffs have put pressure on airports and airlines facing a surge of summer passengers eager to travel.
  • Qantas CEO Alan Joyce, speaking to CNBC’s Dan Murphy about the sector’s recovery, said that after nearly two years of dramatically reduced activity, it’s going to take some time to get the system up and running smoothly again.
  • “The entire industry everywhere is experiencing this, and we’re seeing some of it in Australia,” Joyce said at the International Air Transport Association’s (IATA) 78th Annual General Meeting in Doha, Qatar, on Sunday.
  • It’s “not as bad as you’re seeing in Europe or in the North American market,” the CEO said. “We saw during Easter long queues at airports; nothing like you’ve seen in London, Manchester and Dublin and other places around Europe.”
  • “And I think it does take a while. The system is rusty, everything was closed down for two years,” he added. “It is going to take awhile to get that system humming again. It’s a huge complicated business, there’s a lot of moving parts involved in it.”

CNBC

Buttigieg: U.S. Weighing Penalizing Airlines If Flight Disruptions Continue

KEY POINTS:

  • Transportation Secretary Pete Buttigieg told the Associated Press in an interview Saturday his department may take enforcement actions against airlines that do not abide by consumer-protection standards.
  • Driving the news: As air travel has rebounded from lows because of the coronavirus pandemic, widespread flight disruptions caused by airline staffing shortages and weather have upended schedules and left travelers stranded or scrambling.
  • By the numbers: As of Saturday afternoon, more than 2,900 U.S. flights were delayed and 760 were canceled altogether, according to real-time flight tracker FlightAware.
  • Flashback: Many travelers faced similar issues around Memorial Day, with more than 2,800 flights canceled during the holiday weekend, per FlightAware.
  • What they're saying: Buttigieg's department will wait to see if there are major flight disruptions over the July Fourth holiday weekend and the rest of the summer before deciding whether to step up enforcement against airlines, he told AP.
  • What to watch: The government could levy fines against the airlines, but those have typically been small. Air Canada had to pay a $2 million fine last year because it did not refund passengers quickly enough.

Axios

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Airline Stocks Tumble As Economic Concerns Overshadow Travel Surge?

KEY POINTS:

  • Packed planes. Sky-high airfare. An end to Covid testing for international arrivals. So much is going in airlines’ favor these days — except their share prices.
  • The sector’s latest drop is surpassing a broad market swoon as investors weigh the chances of a recession and just how aggressive the Federal Reserve will get to tamp down the sharpest increase in consumer prices since the early 1980s.
  • American Airlines dropped 8.6% on Thursday, hitting the lowest price since November 2020. Southwest Airlines fell 6%, hitting a nearly two-year low. Delta Air Lines and United Airlines each shed more than 7%, while the NYSE Arca Airline Index, which tracks 18 carriers, lost more than 8%.
  • On Wednesday, the Federal Reserve lifted interest rates by three-quarters of percentage point, the biggest increase since 1994, in an effort to tame inflation.
  • “If you’ve flown on a plane lately, planes are very full and plane tickets are very expensive,” Federal Reserve Chairman Jerome Powell said Wednesday.
  • Strong travel demand following more than two years of the Covid-19 pandemic has been a boon to airlines, with Delta, United and American recently forecasting a return to profitability. Carriers’ executives have said travelers have been digesting higher fares.
  • Airlines have been supply constrained. Delta, JetBlue Airways, Spirit Airlines, Alaska Airlines and others have cut summer flying plans to give themselves more wiggle room for routine disruptions and in some cases to address labor shortfalls.

CNBC

Additional Articles

 

Allegiant Sees Strong Demand Lasting Beyond Summer

The Larger Impact of American Airlines Giving Regional Pilots a Big Pay Raise

 

Upcoming Expos & Conferences

 

PAPA | July 16 | LAS

OBAP | Aug 10 | PHX

RTAG | FTW | Oct 21

 

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