Some airlines and airports are battling the post-covid demand for travel.
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LONDON — Delays, cancellations and strikes. It has been a messy time for a lot of European tourist hotspots as airlines and airports struggle to deal with staffing problems and pent-up travel demand after Covid-19 lockdowns.
1000’s of flights have been canceled and travelers have queued for hours at passport control and luggage collection at airports across Europe — and the problems are expected to tug on.
On Monday, Scandinavian airline SAS canceled 173 flights, greater than half of its schedule, as a breakdown in pay talks set off a pilot strike. It said the strike would force it to cancel half of SAS’s scheduled flights and affect about 30,000 passengers every day.
“Air travel this summer is fraught with uncertainty, each 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 while airlines toe a wonderful line between trying to know hold of the post-pandemic travel boom and preparing for the likely slowdown ahead as economic conditions deteriorate.”
In keeping with aviation data firm Cirium, 400 flights were canceled in all U.K. airports between June 24 and June 30, representing a rise of 158% from the identical seven days in 2019.
And that is outside of the height summer season — often between July and early September in Europe.
London’s busiest airport, Heathrow, asked airlines last week to chop flights, as passenger numbers were above what it could deal with. Some passengers were unaware their flight had been canceled, while others complained in regards to the long queues.
There might be disruption continuing into the summer.
Stephen Furlong, senior industry analyst at Davy
Meanwhile, low-cost airline easyJet has cut hundreds of flights over the summer in an attempt to reduce the chance of disorder. Its chief operating officer, Peter Bellew, resigned Monday after the disruptions. The carrier said it’s “absolutely focused on our every day operation” and that it has “taken pre-emptive motion to construct further resilience for the summer on account of the present operating environment.”
Many have also faced travel issues within the U.S. as they looked to go away for the July 4 weekend, with greater than 12,000 flights delayed and tons of canceled, though disruptions eased significantly on Monday.
And it’s unlikely that travel chaos will unwind in the approaching months, in keeping with Stephen Furlong, senior industry analyst at wealth manager Davy.
“There might be disruption continuing into the summer whether ATC [cargo] driven or ground handling or security staff or indeed self-inflicted labour issues from the airlines,” he added.
In France in June, 1 / 4 of flights were canceled on the principal airport in Paris on account of a staff’ strike.
And more strike-induced disturbance might be on the way in which. British Airways is preparing for a staff strike in the approaching weeks as staff demand that a ten% pay cut installed through the pandemic gets reversed. And Ryanair staff in Spain said over the weekend they’d be striking for 12 days in July, pushing for higher work conditions.
What’s causing the disruption?
There are several reasons for the travel chaos they usually are mostly industry-wide problems, somewhat than a country- or airline-specific issue.
“The pace at which passengers have returned to the skies because the springtime has caught airlines a little bit bit by surprise and airports too. They simply do not have the staff without delay that we would want for a full schedule summer,” Alexander Irving, European transport analyst at AB Bernstein, told CNBC’s “Squawk Box Europe” last week.
Many airlines, airport operators and other corporations throughout the travel sector laid-off staff through the pandemic as their businesses ground to a halt. A lot of these staff searched for opportunities elsewhere and haven’t returned to the sector, while others were pushed into early retirement.
“Ultimately, we want more staff,” Irving said.
As well as, it’s hard to draw recent talent without delay given changes within the labor market, corresponding to the so-called Great Resignation — when staff selected to quit their jobs, often without one other one lined up, in seek for a greater work-life balance.
Hiring recent people can be a medium to long-term solution, as in lots of travel-related jobs there’s compulsory training before staff can start their jobs.
At the identical time, a lot of those that stayed within the sector don’t feel sufficiently compensated and have complained about their work conditions.
It “probably ultimately means paying people more and treating them barely higher,” Irving said in regards to the labor issues and strikes.
At Amsterdam’s Schiphol airport, a bunch of cleaners, baggage handlers and security staff might be paid an extra 5.25 euros ($5.55) per hour this summer, in keeping with Reuters. Nonetheless, the identical airport announced that it can be limiting its volume of passengers this summer, especially to scale back disruptions.
Other countries are also scrambling to enhance the situations are their airports. In Spain, police are hiring more staff at a few of the country’s busiest airports and Portugal can be increasing its border control staff.
“The response by most corporations because the pandemic hit was to scale back capability on the expectation for a sustained period of lower growth. Nonetheless, the pandemic delivered a unique end result: one where the worldwide economy was virtually switched off then switched back on inside a brief time period,” Roger Jones, head of equities at London & Capital, told CNBC.
He said that on top of the labor market shortages, inflation can be a problem.
“Cost inflation, especially fuel and wages, is aggravating the situation and making it a extremely difficult operating environment, which is weighing on profitability,” he said via email.
Many airlines, including British Airways and Air France-KLM, received financial support from governments through the pandemic to avoid collapse. Nonetheless, plenty of unions and airlines at the moment are demanding more help from governments to support the revival of the sector.
Despite the strikes, cancellations and other disruptions, some analysts are still positive in regards to the sector and argue that the recent situation has been “overplayed.”
“I do feel though it’s overplayed by the media and the overwhelming majority of flights are operating and on time. Ryanair, for instance, while operating 115% of pre-Covid capability have planned for this and have largely avoided disruption thus far,” Davy’s Furlong said via email.