Over a week ago, I wrote about the cancellations at United, Delta, JetBlue, and Allegiant that were quickly mounting. Now, more than a week later, we’re still talking about it. This time, every airline is being impacted as a perfect storm causes headaches throughout the industry.
To be clear, I’m not talking about an actual weather event as being “the perfect storm.” Yes, weather is a part of it. It started with the Seattle snowstorm that crushed Alaska and hurt Delta last week. Then weather rolled through Chicago and the Mid-Atlantic and Northeast. Weather is not helping, but as has often been the case this year, it’s a catalyst but not the primary issue.
When I wrote about cancellations last week, weather wasn’t even a factor. No, instead, the issue was more about crew shortages due to already thin benches during the pandemic as well as Omicron illness causing major sick call increases. When you throw weather on top, it’s like dropping a Mentos into a bottle of Coke that you already shook up vigorously. It does not end well.
The problem from the outside is trying to understand exactly what is going on here. It’s not really very easy to figure out, because every piece of data shows something different. And the data that would really help isn’t readily available, like number of sick pilots by base as compared to normal.
It has been suggested that airlines overscheduled themselves this holiday season, but I don’t really see that. Let’s start with the number of departures by day for the Big Four.
Scheduled Daily Departures by Airline – Big Four US Carriers
Then using a different scale to make it legible, here’s the rest of the airlines of interest.
Scheduled Daily Departures by Airline – Smaller US Carriers
What can we take from this? Well, in the top chart you see that Southwest was the only airline to really surge its schedule during the holidays, and it didn’t have operational issues until the very end. Meanwhile, look how much Delta cut back between Christmas and New Year’s, yet it was one of the airlines hit hardest.
In the lower chart, we see that JetBlue surged the most which tracks with the airline’s poor operational performance. But Spirit also had a big surge, and it didn’t have operational issues until much later. So the schedule alone doesn’t really help us here.
If I turn to masFlight, we can see how things have actually been operating.
Completion Factor by Airline 2021/2022 Holiday Season
What a terrible, terrible chart. At the beginning of the month, the airlines were where they were supposed to be. You can see on the 23rd how United, Delta, JetBlue, and Allegiant start to fall off. Then on December 26 the Seattle snowstorm hits and takes Alaska down to under 65 percent completion. That’s also when Spirit takes a hit. At the end of the year, American, Frontier, and Southwest finally join the rest of the party when the Chicago and Northeast weather hits.
Things really bottomed out on Jan 3 when not one of these airlines completed more than 90 percent of flights. (I should note that both Hawaiian and Sun Country did, but they don’t count in the same way due to geography for Hawaiian and small size of Sun Country. Still, good on them.)
The 4th saw a nice rebound, as you’d expect to see after a storm. The 4th should also have been better, because for many airlines that was the start of the post-holiday schedule where at least some airlines have more slack built in. But now the next storyline will start to unfold.
Look at Southwest lagging there and starting to separate from the pack, and not in a good way. The FlightAware dashboard around mid-day yesterday (the 5th) shows Southwest had canceled 16 percent of flights. That’s even worse than on the 4th. Alaska was also at 16 percent. I asked Alaska for a statement on when things would get back to normal, but it sounds like the airline doesn’t really know. The statement began like this:
Like many other airlines, this latest surge of COVID is driving higher-than-usual absences among all our workgroups, consistent with nationwide COVID trends. This is compounded by the residual impacts of winter weather in several of our key hubs.
For Jan. 5, we have canceled 112 flights across our network and guests have been notified by email. We sincerely apologize for the considerable inconvenience and understandable frustration that our guests have experienced this past week.
This isn’t a knock against Alaska. After all, how could you know how many people will call in sick tomorrow or the day after? It’s just impossible in the current environment.
The good news here is that the way Omicron is racing through the population, it has to burn itself out fairly quickly. (This, for the record, is only good news if you’re vaccinated which means symptoms are likely mild and hospitalization is rare. If you’re not, you might find yourself in an overworked and understaffed hospital, so… good luck to you.) I expect January will continue to be very ugly for the airline industry, even with the isolation period reduced to 5 days for those who get sick.
At some point soon, we are going to have to start treating COVID like the endemic disease it is becoming. If someone is vaccinated, should they really have to isolate if they get sick and are asymptomatic? Or what if they just have the sniffles? Just imagine if people were forced to stay home for 5 days if they had a minor cold. Until we start treating COVID in a similar way, I imagine these types of disruptions will become the norm any time a highly transmissible variant makes it way through the population.
Then we can go back to the normal disruptions from pilot shortages (which I didn’t even bother bringing up in here despite notable impacts at many regionals), operational mismanagement, and all the other fun stuff that plagues the industry on a regular basis.
45 comments on “The Perfect Storm Continues to Toy With Airline Operations”
Operational mismanagement is something they do control – and to put it charitably, “Airline Magical Thinking” – or more realistically, Airlines Lie All The Time is a purposeful plague they continue to perpetuate. There are many situations they do know operationally what is going on – when an inbound plane is X late [with no possibility of replacement] why do they insist on posting ontime often until the plane pulls into the gate, past that ontime departure? Or when waiting for a crew member coming in on X flight. Until they post a new/realistic time, passengers can’t be rebooked. Telling everyone to check the app/web does no good with garbage information and extreme footdragging.
More importantly for all of them in these “regular plagues” that result in passenger disruption – they’re completely hobbled by an inability/refusal to book on other airlines. I’m shocked that no one – from the DOT, to congress, to airline management, to reporters – asking why something like the old Rule 240 isn’t reinstated to transfer passengers between airlines during IROPS. Airlines lobbied successfully to get rid of it for their own reasons – but this level of disruption, with so few alternatives, supercedes any macho snits that have gone on between them.
An avalanche of waivers, with their unique peculiarities, doesn’t begin to address it. Saying they waive change fees doesn’t. If the various entities can swoop in to mandate new rules for ships waiting in the harbor – why should they have less concern for actual people waiting in airports? And speaking of – the airlines, with a complicit media, telling people to arrive hours ahead becomes a self-fulfilling prophecy of crowdedness if everyone is waiting longer for the same number of flights. And just another example “operational management” decisions making things worse: refusal to reinstate skycaps, outsourcing them to companies so they don’t staff as needed in the rare cases where they’re back.
I’ve said it several times before and I’ll say it again – the US needs to introduce similar legislation to EU 261. I got a check for $4K from Austrian Airlines due to IROPS over the summer because they had a maintenance delay that made us miss a connection and did not rebook us on another route for 24 hours. I paid $600 to fly Vueling out of pocket so still made money off of it.
If the airlines (specifically, the shareholders) benefited from my tax dollars through CARES to survive Covid (since they’re viewed as essential), they should be subject to more appropriate consumer protection laws. The airlines continue to blame everyone but themselves and I say this as a strong advocate for the airline industry. Like Boeing, they focused on short term share buybacks, etc., and did not actually run their business. You can complain all you want about consumers “always choosing on price” but “giving the consumer what they want” but you still need to run the operation.
Unless they change the rules on lobbying, it is never going to happen.
The “rules” on lobbying are found in the U.S. Constitution, specifically the First Amendment. “Congress shall make no law … abridging the … right of the people … to petition the Government for a redress of grievances.” If the operational meltdowns continue, there will probably be legislation, just like the situation with the 3-hour tarmac rule. But has that rule really helped? I don’t know.
I don’t have any data for you, but can say that the rule definitely factors heavily in the decision making at my airline.
Airlines, notably the US ones, have proven time and again that they have a long way to go before they master operations. Yes, pandemics and bad weather can and do wreak havoc on schedules, crew placement, and so on, but the industry remains slow to adapt to create more robust redundancies in IT and in Ops and until they do, they will continue to experience meltdowns like this. The notion that the industry is “seeing” recovery is also pure nonsense. Business travel, as it existed in 2019, will never return to such levels. Relying on leisure demand is a folly. The industry will soon stare down another round of consolidation, this time forced by activist investors and speculative tools like SPACs. AS, B6, and WN are all takeover candidates to assure that the big 3 US carriers don’t fail. It’s 2008 all over again, except this time, it is for the airline industry. A $50 billion bailout for the sector just isn’t in the cards again without forced rationality so they stop screwing their customers and their employees.
“The notion that the industry is “seeing” recovery is also pure nonsense. Business travel, as it existed in 2019, will never return to such levels. Relying on leisure demand is a folly. The industry will soon stare down another round of consolidation, this time forced by activist investors and speculative tools like SPACs. AS, B6, and WN are all takeover candidates to assure that the big 3 US carriers don’t fail. It’s 2008 all over again, except this time, it is for the airline industry. A $50 billion bailout for the sector just isn’t in the cards again without forced rationality so they stop screwing their customers and their employees.
Three questions Shoeguy,
1. How do you know business travel will never recover to 2019 levels?
2. How does forced rationalization benefit both the industry & the public at large?
3. Once you get to “too big to fail” you are aware you’re to big to function properly or yet exist… right?
I’ve been seeing firsthand how fast Omicron is ripping through the population. In my station alone we have a sizeable percentage of people out. Enough to affect the operation, and that’s just one line station at one carrier.
The upside is that with high vax rates, it’s become more a logistical hurdle than anything else, and not a medical scare like it might’ve been in early 2020.
Vaccines work. It’s that simple.
I truly think Omicron is the tipping point for this country. People will see that vaccines work and get one. Those that hold out? Well, as CF said, good luck to ‘em. Sometimes dry brush needs to burn for a forest to heal. (Shrugs)
We’ve already collectively shifted from pandemic to an endemic mindset. Is COVID “over?” From an epidemiological standpoint, absolutely not. From a sociological one? 100%.
Don’t take my word for it; go to your local school board meeting and propose shutting them down for 2-3 weeks… see what happens.
I was told by the President, the CDC, Fauci, and others for almost all of 2021 that vaccines stopped transmission, that they were 95% effective against contracting COVID, and that they were 100% effective against hospitalization and death. I was also told by those same parties that if we were able to get 70% of people vaccinated, we would have herd immunity and COVID would go away. I was also told that our President was going to shut down the virus. Let’s not memory hole the bill of goods we were sold. Using the benchmark of Q1 2021, there should be near-zero staffing problems because we were all told the vaccine was near-perfect and COVID would be gone.
Brett and some commenters have an awful interesting way of saying the vaccine “works.” They also have an interesting way of talking about some of their fellow citizens who have made a personal choice – for whatever reason – to not receive a vaccine that clearly doesn’t work as advertised, and side effects for which may outweigh the clinical benefit for young, healthy people. I’ve never seen so many people – Cranky included – wish ill will upon a segment of their fellow citizens. And you know why some hospitals are crowded? Because many chose to fire the unvaccinated, actually reducing the number of hospital beds available – not only for COVID patients, but all patients. New York actually has thousands FEWER hospital beds now than two years ago. All the doctors, nurses and “heroes” of 2020 that worked days without ANY vaccine and survived, are now the villain? Is a medical professional who saw the pandemic firsthand doesn’t wish to take a vaccine – that speaks volumes, does it not?
Stick it aviation, Brett. And maybe try on an ounce of compassion and understanding for those who may make different choices than you. And different choices than United’s mandate…that clearly is working oh so well.
Maybe you need to listen better to what was said. The vaccines’ were always touted as reducing the risk of hospitalization. No one said that it was 100% effective against COVID, because that is not what the data showed. The vast majority of people who have been hospitalized have been the unvaccinated. Even with the Omicron variant, vaccinated people have been affected less severely and they contagious for a smaller period of time (and this is also true of the Delta variant). It’s funny how so many unvaccinated people will go to the hospital and gladly take monoclonal antibody treatment (which is less effective against Omicron) which relies on newer technology than the vaccines (which rely on techniques developed 40 years ago). If people had similar attitudes towards vaccines 60 – 70 years ago, we’d still be suffering from Polio. Cranky is absolutely right on this.
No. You are wrong. We were told that you would not get sick because you are vaccinated. Everyone in NYC thought they were invincible. Then the CDC changed the definition of vaccination to match the narrative as the vaccines were only good as a prophylact.
All evidences show that vaccines work. They were great at preventing infections before Delta variant came. With booster shot, they are pretty good at preventing Delta also. Even in cases where we have breakthrough infections like we do now, they basically prevents anyone that’s not old or immune-compromised from getting severe case.
Have you actually looked at how much vaccines reduce severe case and death? It doesn’t sound like you have. What are these terrible side effects? And please show real medical research. I’ve had 3 shots now and haven’t got anything other than a sore arm. Everyone in my family have been vaccinated. The worst case we’ve had was fever for an afternoon.
Do you have any stats on how many people in NYC health care system got fired due to not wanting to taking the vaccine? Please provide real stats rather than anecdot. If you are not from NYC, please do not talk about my city. And no, I don’t want non-vaccinated nurse from treating me. And I’d be shocked if I ever find a doctor in NYC that’s not vaccinated. The vast majority of adults (over 90%) in NYC are vaccinated. That’s why this omicron wave (or the delta wave before that) has caused very little uptick in deaths and hospitalization. Vaccines work.
Excellent observations!
They are actually pretty awful opinions, not observations
Vaccines work to make your symptoms milder if (and when) you get COVID. That’s what they do. And I can personally attest to that, having had the Delta variant not long ago and it was not even as bad as many colds I’ve had. In that sense, the vaccines are great. But here’s what they DON’T do:
1) Prevent you from contracting the virus;
2) Prevent you from transmitting the virus;
3) Eradicate the virus.
As none of the above are true, let’s knock off the scapegoating of the unvaccinated. And, OMICRON is a milder variant – which is to be expected as viruses tend to evolve in such a way that they are more transmissible and less likely to be fatal (thus killing their host, which isn’t good for their survival either). We have to learn to live with this and to stop crapping our pants every time the news comes on with yet another apocalyptical report on the ‘vid (and they’ve outdone themselves with OMICRON). Learn to lrive with it, it’s evolving into an airborne version of the cold. And nothing will stop this.
It’s not just the pax airlines.
While presumably far fewer packages being shipped this week than in the week or two before Christmas, FedEx has had repeated service disruptions, and has cited similar reasons (storms at the Memphis hub, sick calls due to COVID, etc).
These aren’t just the usual, “Storm impacted [area]. Expect delivery delays…” service interruptions that are common when a major storm or natural disaster hits a localized area. Rather, these are US-wide service interruptions where FedEx basically tells major corporate customers, “Our US network is too backed up, so we won’t be accepting packages of such-and-such characteristics (e.g., perishable) or service types (e.g., overnight) tomorrow (or until Monday, or whenever), so that we can focus on working through the packages that are already in our network.”
I don’t mean to be critical of FedEx here, and I’m personally somewhat sympathetic towards them, but it’s interesting to see a major freight airlines in the same (much delayed) boat, so to speak.
Given that by now the rush of holiday shipments would presumably be over by now in normal years, the issues at FedEx and at other companies across the country (especially those in logistics) this week suggest that pax airlines’ aggressive scheduling of people and planes in the past 3-4 weeks may not have been as significant a factor as I originally thought it was.
We’ll see. Once we’re all past this and back to a healthier “normal” (in terms of flight cancellations and human illnesses) I hope the airlines and academics will study the contributing factors on these service issues and the effectiveness of various strategies that were used to deal with the situation, as I’d love to see some good analyses, interviews, and/or HBS case studies breaking it all down.
It’s not just airplanes. Public transit systems have staff shortages too. Here’s the first post in a short Twitter thread from San Diego’s Metropolitan Transit System discussing disruptions due to driver shortages, including plans to adjust schedules: https://twitter.com/sdmts/status/1479161804588683266?s=21
Yup. A friend in Boston had her 45 minute morning commute on the T stretch to 105 minutes, and that on a day in which weather was not a factor (no storm in the past 5-7 days, and on a day when there was ZERO precipitation and negligible wind).
The public transit systems can advertise all they want to try to get riders to come back to them, but if the transit systems don’t have the staff to maintain reliable services, they’ll just turn people off.
FedEx is it’s own special operational mess. UPS, Amazon, USPS, and the others have managed to keep their networks together and working. FedEx’s seems likes it’s just melted down. Their ground operation has been a mess for a long time. And apparently Express is now having issues as well. It’s kinda sad and pretty pathetic.
I’m pretty sure you could get an untrained mule to deliver a package faster than FedEx ground.
It’s interesting to see so many intelligent (?) people at cross purposes. As I’ve said previously, the shingles and ‘flu vaccines don’t prevent shingles or the ‘flu. So, maybe we are listening to too many ‘sound bites’ where people say ‘the vaccine works, and you won’t die’ etc. You are over-relying on the vaccine, and over-relying on the media being accurate in their reporting! Anyone in this business knows first hand are woefully inaccurate the media reports on aircraft accidents and incidents.
I have no doubt that many of the comment writers here are good and fine people. Perhaps we all need to do a little ‘soul searching’ to determine exactly what is going on, and what isn’t? Together, we can work our way through this. I have immense empathy for those continuing to pick up the extra work because so many people are out sick – regardless of their philosophical viewpoints!
Let’s work together!
Thank you
Thank you for the followup article on airline IROPs with data which is necessary to better understand what is happening; of note, airlines do not have a code for covid staffing issues when they report the reason for an IROP to the DOT so it will always be impossible for the public and aviation fans to know the single reason that airlines use for an IROP . With that caveat, your data and analysis is pretty spot-on.
It is important to note that, WRT covid, we are testing for a virus unlike has ever occurred in the history of humanity. Just because we are seeing huge numbers of infections doesn’t mean that there wouldn’t have been much higher numbers for other diseases compared to the number of people we thought were healthy. There are covid quarantine requirements for covid but there isn’t for other diseases including the flu. IOW, we are being impacted by the very system that was created to limit disease spread, even for people that have little to no symptoms and that is true for the flu, which happens to be at very high levels this winter as well.
Winter weather has been much more of an issue this holiday travel season than at any other time during the pandemic. AS never recovered after the first major snow event in SEA before the next hit; DL was impacted but SEA is obviously a much smaller part of their network. CHI and then WAS have been hut by winter storms and the Mid South is getting it today; WN simply cancels extensively when deicing is required where other carriers “thin” their operations but keep moving.
AA and WN’s incentive pay and bonuses clearly helped reduce cancellations but it cost money; we will find out how much within the next few weeks as 4th quarter financials are reported.
As for covid itself, there are still over 100M unvaccinated Americans and yet the number of unvax people that have died since vaccines were readily available is still proportionately very low. It is worth noting that FL and NY, very different politically, are both now asking hospitals to distinguish between patients that are covid positive but not there for covid symptoms from those that are true covid patients. The US has tracked covid differently and the new data will provide better insight into who is really dying and being hospital because of covid rather than just with it.
Kevin is right that America is psychologically “over” covid; from an airline standpoint, that means public tolerance for using covid as an excuse for bad operations will grow thinner and thinner. The challenge until covid reaches a true endemic point is to staff sufficiently to cover cancellations due to covid positive staff.
Sorry to hurt your narrative, but AA pilots never had the incentive pay. And delta and united seemed to struggle a great deal more than AA there.
I don’t fly them often, but AA did just fine for me this past holiday. I chose them because of 1/2 the price to take 9 people on a holiday vacation. I did not sense any slowdown or trepidation in people traveling, going to eat, etc.
I like these sorts of posts because it shows a big picture in a concise format with some interpretation.
What I’m really interested in is which airline can handle a SURGE in demand? Which airline can flip that chart the fastest? It feels like United may be in the best position to do so with aircraft coming online, kept most of the widebodies, kept employees on staff, but someone is going to win the demand race that is coming at some point.
Realistically, the ‘demand race’ isn’t a huge problem because the airlines can just raise prices and not sell the cheapest fares. Capacity control, whether intentional or not, works well for the airlines if they all do it.
I keep asking and never get a good response.
Those of you demanding the government step in and make the airlines do this and do that, how much more in airfare are you willing to pay for that?
Nothing in life is free. Everything you get the airlines to do? That’s going to wind up in the fare you pay.
People have this idea that corporations are magic money machines. They aren’t – that money comes from customers. The more you mandate they do, the more money it’s going to cost YOU.
I’m more than absolutely willing to pay a little extra to ensure I make it to my destination on time. If Ryanair can abide by EU 261 and still make money, pretty sure DAL and UA can.
Regardless, the problem is that the majority of the traveling public does not fully understand the contract of carriage or the airline limits of liability. You could blame the public but every time one of these meltdowns occur, but the media will show PAX sleeping on the floor of the terminals, in tears or rioting at the Spirit counter. In some ways, the government does need to step in to save people from themselves. The average consumer does not read this blog and does not likely understand the intricacies of crew rest requirements, etc. I think everyone who reads this blog recognizes that airlines are not magic money machines (my favorite joke – “how do you end up with $10MM by buying an airline? Start with $100MM.”). But
The facf of the matter is that the industry is already very highly regulated, not only in the US but other countries as well. Remember how people last week were held against their will on an airplane for 12 hours due to a snow storm? Yeah, neither do I, because the government mandated that airlines return to the gate after three hours after operational meltdowns 15 years. My point is, if other countries can hold airlines accountable for delivering service that they have agreed to, why can’t we?
And I already paid more – through my tax dollars and the CARES act which Delta (among other airlines) used for a lot of things other than keeping people on the payroll.
I’m agreeing with this — especially in this circumstance. Airlines are not responsible for public health guidance which is right now “If you are sick with the sniffles, stay home.” That’s crazy. I’ve flown so drugged up on Day Quill before I was probably legally intoxicated. Call me a bad person or whatever but I am sure flight attendants and ground crew have down the same thing. Hopefully not pilots but maybe.
We have a set of circumstances where if the country was vaccinated at 80-90% we could limit the amount of sick time if you have Omicron to 0-4 days. Not 5-10 days depending on which public health guidance you read. Let the mild virus rage across the vaccinated and deal with the health fallout which appears to be manageable. So we are reacting to the fact that only 60% of the population is vaccinated, and we want to keep hospitals functioning since they are at risk of clogging the system. We are kneeling to the unvaccinated to keep society moving. Its insane but since there is no vaccine mandate this is what we are stuck with.
The only thing the airlines could have done differently is do a firm “no vaccination no fly” mandate for passengers which would have moved vaccination rates upwards. But blaming the industry for poor personal choices is not the answer. And paying out customers for this is even worse.
Yes, it is time for an EU 261 law. Airlines presently have no incentives to preventatively build operational resiliency.
The concepts and principles of “just-in-time” manufacturing was applied to airlines in the last 15 years, too. It resulted in remarkably efficient operations and skyrocketing profits & shareholder returns, and the trade-off was a complete lack of resiliency when operations encounter familiar issues like labor struggles, sickness, weather, etc.
If the airlines will not back down from their obsession with remaining overly-efficient, then regulators will need to step in and force them to do it, instead. They are doing a poor job of self-regulation. And, *keep in mind* that the industry received an enormous, unprecedented bailout of taxpayer money only to perpetuate the same customer-unfriendly policies.
European Union airlines recognize the staggering cost differences between canceling a flight due to lack of crew vs. just hiring enough crews to stand by on reserve. They didn’t come to that realization on their own; they were forced into it by regulation. It’s time for similar legislation in the U.S.
Alex, how much more in airfare are you willing to pay for such requirements?
John G., how much are airlines willing to reduce dividends, buybacks or executive compensation for such requirements? “BuT fArEs wIlL gO uP!!1!” is an A4A talking point. Airlines in the E.U. have made it work, so will airlines in the U.S. The haunting, non-specific threat of “airfare increases” is the go-to spin on regulation discussions, and it’s pretty tired and old now.
If Ryanair and Easyjet can make money in the EU operating with EU 261 in mind, any airline can. I bought 5 tickets with 4 hours notice to fly from Croatia to Rome. It cost me less than $500. It absolutely can be done but unlike all the stock buy backs, etc., airlines there are actually investing in their operations. Time and time again the airlines (just like Boeing) have sacrificed short term benefits for a few at the expense of their employees, et al. And because they are a business, they’re absolutely entitled to. But guess what? You shouldn’t take handouts from the federal government that only mildly benefits your employees and instead saves shareholders (who are the ones that should be on the line when a company fails).
There simply is no comparison between the service levels on Ryanair and most US airlines. And Ryanair and other European carriers do not have re-protection responsibilities on other carriers.
The EU simply does not have an open market as the US does as evidenced by the size of ULCCs in the major airports of Europe like AMS CDG FRA and LHR. US ULCCs and LCCs have far more access to more capacity in the largest and most lucrative airports in the US than airlines do in any other part of the world.
And it really does not matter if an anecdotal group of people say they will pay more for higher fares; airlines build their network and their routes around the totality of what they need in revenue. There have been ample examples of premium niche carriers in the US and they simply have not lasted.
and the overriding concern by the DOT has been and continues to be on low fares and expanding the market to more people than it does to provide higher levels of service. Most regulations are about information more than changing behavior including the 3 hour tarmac rule. You need only look at Southwest’s habit of cancelling flights rather than accepting delays in winter weather – and you need only look at BNA today which got snow, isn’t a terribly large market, WN is the dominant airline, and almost 50% of the flights for the airport are cancelled as the top city in the US for cancelled flights.
I’m not proposing re-protection. What I am proposing is financial penalties to ensure airlines actually deliver on the service that they have contractually agreed to provide to the consumer. And yes, I’m one of the few people that have read the contract of carriage and I know the airlines are only liable for what one pays. But is that enough? I would argue it’s not enough, especially when airlines aren’t properly managed.
You are right – a large percentage of consumers will not voluntarily agree to pay more because one airline will always undercut to capture the price conscious consumer. No argument there; I loved Midwest Express (those cookies!) but they never stood a chance. Hence the need for legislation. Remember how lax environmental laws used to be? That’s no longer the case because consumers said “enough.”
Regarding the ULCCs in major airports, I think one could only look at their returns to see that they’re doing just fine. If Ryanair can become Italy’s #1 airline, protectionism isn’t as strong as you may think.
Let me ask it a different way – is your perspective that an EU 261 type rule will not work in the US or are you simply against the idea? Yes, there would be a financial implication for the airlines but I think we can all agree the airlines have the money. Delta did $11.5 billion in stock buybacks between 2013 and 2019. And I don’t want to get into a philosophical argument about airlines existing for shareholders (yes, they do but don’t come begging for money because you managed your business poorly). What I’m arguing is we need stronger consumer protections in this country when it comes to how airlines compensate passengers for their own failings. I’m seeking accountability.
Italy is not the case study for market access in Europe which is why I asked you the percentage of ULCCs in AMS CDG FRA and LHR, the biggest markets. I will tell you it is very low and it is because Europe has not forced market access for new carriers anywhere to the point the US has done -which is why you see ULCCs with a 10%+ share in LGA, ORD, DCA and LAX, all airports that are highly valuable and also were at the capacity limits that European airports were at and yet the US pried those major US airports open to new competition.
You can look at what financial penalties do to airlines that screw up the operation via the tarmac rule – and it happens every time there is a major winter weather – they cancel flights rather than run the risk of fines. You can argue whether it is better if airlines simply cancel the flight due to weather before hand, but customers still aren’t going anywhere.
Ryanair to my knowledge does not have to “rule 240” passengers onto another airlines which is the only thing that really helps get the passenger where they need to go.
There is no customer benefit of fining an airline – it simply gives the airline an incentive to not risk being fined.
If the US did anything, the requirement should be to require that airlines attempt to put you on another airline if you are delayed X hours. The legacy airlines have the systems to do that but might restrict it to certain fare types; LCCs and ULCCs don’t have the abililty to do it and they have resisted any industry type “rule 240”
If there is bad weather that cuts capacity for all airlines, very few people are going anywhere. If situations such as at AA, WN and NK this summer where there is an airline specific problem, a rule 240 requirement would get people moving on some airline.
and, finally, many US airports operate at their maximum best weather situation. Changes in winds, bad weather, or deicing cannot work w/ full, normal schedules and result in delays or cancellations; that is not true in many other airports around the world.
I think the discussion of market access (or lack thereof) is a distraction from the point Chris was trying to make by bringing up Ryanair and EasyJet. The claim was that having an EU 261-type rule would cause airfares to rise in order for the airlines to cover their costs. But both Ryanair and Easyjet are subject to EU 261 and continue to offer quite low airfares.
Ryanair and Easyjet do not have access to the higher value markets so they have no choice but to offer considerably lower fares in order to pull people out to the ULCC hubs.
Euro ULCCs live with EU 261 regulations because it is a cost of business. You have no idea how much lower their fares would be if they didn’t have those costs.
And my primary point is that fines against carriers do not do one iota to help passengers. Well you might get sent to a hotel at the airline’s expense if your flight cancels but it won’t get you home any sooner.
The best pro-consumer change to airline regulations would be to require airlines to allow you to take your ticket to another airline if they can’t get you on your way within X hours.
But low cost and ultra low cost carriers don’t want it.
and the reason why airline service is what it is in the US is because the government continues to prioritize cheap fares and more seats than to offer higher quality service. The capacity at US airports, the amount of access of low cost and ultra low cost carriers at the nation’s most restricted access airport, and the continued drop in airfares in the US are all proof.
While there is very little that I see eye to eye on with Tim, I couldn’t agree more with what he is saying. I think from what I’m reading in this thread, folks would be okay with RYANAIR or EASYJET level service and product for every single one of your flights, so that just in case you get caught in a delay event (what 1x or 2x/year, maybe?), the airline would receive a fine? Really? I would imagine a lot of these same people want always available award redemptions, cutting edge IFE, BC Suites (with doors, or course), and lounges that pamper every desire. Where are those things on Ryanair and Easyjet?
Also, please don’t take this as a criticism of your writing, Cranky, but the “perfect storm” analogy sort of implies rarity or an unusually significant set of circumstances that results in misfortune. You can see the frequent usage of this phrase in relation to meltdowns on the CF site, here: https://www.google.com/search?rls=en&q=site%3Acrankyflier.com+%22perfect+storm%22
Airline management is quite fond of using the term “perfect storm” to describe when their fragile, precariously lean operations go to hell. This implies that somehow the operational failures are always due to external factors outside the airline’s control. How many “perfect storms” could there be? Two perfect storms per year? One? Three? If its happens multiple times per year, is it really a “perfect storm” or just another storm, you know, like the ones that happen *repeatedly*.
This over-used analogy allows executives to shift the blame for excessively thin operational margins away from intentional, shareholder-driven decisions to outside, uncontrollable factors. Snow storms play a part, sure, but guess what? It snows in Seattle every year. It would cost more to prepare for it, but nobody is forcing them to prepare. The time has come to forcibly require airlines to be more resilient.
Alex – Fair criticism, and I’ll gladly take it. The term is most certainly overused, but I really don’t think this is the kind of thing that could easily be planned for. (Weather, yes, but not the rest of it all combined.) Still, perfect storm is probably an overreach.
I guess that could be the case, CF, but I would argue that we are nearing 24 months of continuous COVID operations, and, despite repeated examples to the contrary, airlines have a stubborn insistence on optimism that we are constantly about the turn the corner on the virus. In the meantime, airlines had their payrolls covered by taxpayers for about a year-and-a-half, and even then *still* chose to downsize their workforces through voluntary separations (and layoffs at the conclusion of PSP). Airlines executives continue to make bad decisions on COVID-related staffing and keep acting surprised when the virus predictably surges back. At what point do executives stop blaming everybody and everything else for their failures and start accepting responsibility? Probably not until the government forces them to consider the financial ramifications of excessively lean operations, even in multi-year pandemics. If shareholders like Tim Dunn insist on increasing financialization built on razor-thin operational margins, somebody else needs to be looking out for the public interest. It is time to regulate, or else you might as well start an airline that never flies in the winter and call it “Perfect Storm Air.”
Alex,
the US decided in 1978 under Democratic President Jimmy Carter to deregulate the US airline industry and allow market forces, rather than government regulations and restrictions, to dictate how the US gets its airline service. Even before deregulation, airlines were publicly traded companies. RyanAir is a publicly traded company – that is traded on the NASDAQ even though it does not serve the US. The notion that free market capitalism misses the point which is what are the real issues for airline service and what solutions really fix them.
Airlines generate enormous amounts of data and thus you see service disruptions on just about the same real time data as you see for covid case numbers. I have spent the entire pandemic hearing or reading advisors from other companies and public institutions about reduced service levels due to short-staffing. Perhaps you have the percentage of WalMart employees that are out on covid sick leave today?
Wal-Mart did not receive an industry-specific bailout of its entire payroll for 1.5 years, a bailout that was granted due to the critical services that industry provided to American commerce. There is a difference. The airline industry wants to be viewed as so important to national commerce and infrastructure that it requires unprecedented cash bailouts, but at the same time feels is has no responsibility to reliably manage their operations for the benefit of the public. This is an imbalance, one the airline industry had plenty of time to proactively improve, and one that lawmakers should reactively address through regulation.
Airlines across the board have chosen to prioritize financialization over operations for 15 years now. Taxpayers bailed out the financial aspects under the ruse of the operational services the airline provides. It is time to hold the operation – and the executives responsible for it – accountable. Sorry about your dividends. :-(
Alex – So would you then suggest that pretty much every business in America is poorly run and unprepared? The current Omicron infection rate is unprecedented during this pandemic, and it is having enormous, unexpected impacts. One of my favorite restaurants locally had to shut down temporarily because it doesn’t have enough employees. The idea that airlines could somehow be better prepared for this I find impossible.
If the airlines don’t get their acts together relatively soon there will probably be some kind of legislation. The difficulty with most legislation is that there are usually two laws passed – the primary law, and the law of unintended consequences. The “cure” can often be worse than the disease. As the old saying goes, “Be careful what you wish for. You might just get it.”
The idea that we will make airlines cover the additional cost of guarantees out of their profits or buybacks is very naive.
Whatever added cost will get passed on to the consumer, just like mandates for air bags etc in cars do.