Some airlines and airports are struggling to cope with post-Covid travel demand.
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LONDON – Delays, cancellations and strikes. It’s been a messy time for many European tourist hotspots as airlines and airports struggle to cope with travel demand following Covid-19 shutdowns.
Thousands of flights have been canceled and recent travelers have queued for hours at passport control and baggage claim at airports across Europe – and problems are expected to drag on.
“Air travel is full of uncertainty this summer for both passengers and airlines,” Laura Hoy, equity analyst at Hargreaves Lansdown, told CNBC via email.
“Long delays and cancellations are likely to hurt consumers’ desire to travel, while airlines walk the fine line between trying to hold on to the post-pandemic travel boom and preparing for the likely slowdown ahead as economic conditions worsen.”
According to aviation data company Cirium, 400 flights were canceled at all UK airports between June 24 and June 30, a 158% increase on the same seven days in 2019.
And that’s outside the peak summer season – usually July to early September in Europe.
Heathrow, London’s busiest airport, asked airlines to cut flights last week as the number of passengers exceeded the number of air passengers. Some passengers were unaware their flight had been cancelled, while others complained of long queues.
Disturbances continue in the summer as well.
Stephen Furlong, Senior Industry Analyst, Davy
Meanwhile, budget airline easyJet has cut thousands of flights over the summer to reduce the risk of disruption.
Travelers faced similar problems in the US as they planned to get away for the July 4 weekend, with more than 12,000 flights delayed and hundreds canceled.
And according to Stephen Furlong, senior industry analyst at asset manager Davy, the travel chaos is unlikely to resolve itself in the coming months.
“There will continue to be disruptions over the summer, whether by ATC [cargo] management or ground handling or security staff or indeed labor issues caused by the airlines themselves,” he added.
In France, a quarter of flights were canceled at Paris’ main airport in June due to a strike by workers.
And more strike-related disruptions could be on the way. British Airways is preparing for a staff strike in the coming weeks as workers demand the reversal of a 10% pay cut imposed during the pandemic. And Ryanair workers in Spain said at the weekend they would strike for 12 days in July to win better working conditions.
What’s causing the disruption?
There are many reasons for travel chaos, and they are mostly industry-wide issues rather than country- or airline-specific issues. To see also : Travel in the fourth of July: Flight cancellations continue as the holiday approaches.
“The rate at which passengers are getting back into the skies since the spring has surprised the airlines a little bit, as well as the airports. They just don’t have the staff right now that we need for a full summer schedule,” Alexander Irving said. AB Bernstein’s European transportation analyst said on CNBC’s “Squawk Box Europe” last week.
Many airlines, airport operators and other companies in the travel sector laid off workers during the pandemic as their business came to a standstill. Many of these workers sought opportunities elsewhere and have not returned to the sector, while others were forced into early retirement.
“At the end of the day, we need more staff,” Irving said.
In addition, it is currently difficult to attract new talent given the changes in the labor market, such as the so-called “great resignation” – when employees decided to leave their jobs in search of a better working life, often without a second job. balance.
Hiring new people is also a mid- to long-term solution, as many travel-related jobs have mandatory training for employees before starting work.
At the same time, many of those remaining in the sector do not feel adequately compensated and have complained about their working conditions.
“It probably ends up being about paying people more and treating them a little bit better,” Irving said of the labor issues and the strike.
A group of cleaners, baggage handlers and security staff at Amsterdam’s Schiphol airport will be paid an extra 5.25 euros ($5.55) an hour this summer, according to Reuters. However, the same airport announced that it will limit the number of passengers this summer, primarily to reduce disruption.
Other countries are also trying to improve the situation at their airports. In Spain, police are hiring more staff at the country’s busiest airports, and Portugal is also increasing its border control staff.
“Most companies responded to the pandemic by cutting capacity, anticipating a sustained period of lower growth. However, the pandemic produced a different result: the global economy was virtually shut down and turned back on again within a short period of time,” Roger Jones, London & Capital, told CNBC.
He said that in addition to the lack of a labor market, inflation is also a problem.
“Cost inflation, especially fuel and wages, is compounding the situation and making it a really challenging operating environment weighing on profitability,” he said via email.
Many airlines, including British Airways and Air France-KLM, received financial support from governments during the pandemic to avoid collapse. However, several unions and airlines are now calling for more help from governments to support the revival of the sector.
Despite the strikes, cancellations and other disruptions, some analysts remain bullish on the sector and say the recent situation has been “overplayed”.
“It seems to me that the media has overplayed it and the vast majority of flights are taking place and on time. For example, Ryanair has planned 115% of its pre-Covid flight volume and has largely avoided disruptions so far,” said Davy’s. Furlong said via email.
