It came off as a rare moment of candor for the airline industry 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 that in 2023.
“The system simply can’t handle the volume today, much less the anticipated growth,” Kirby said. “There are a number of airlines who cannot fly their schedules. The customers are paying the price.”
The year 2022 was one of the most stress-inducing for consumer air travelers in recent memory. A surge in travel demand after airlines slashed resources during the pandemic caught carriers flat footed. Unable to adequately staff flights, they nevertheless continued to sell record-breaking numbers of tickets, resulting in more than one in five flights being delayed, according to the U.S. Bureau of Transportation Statistics — the highest rate of delays since 2014.
By Memorial Day last year, airfares were soaring, and flight cancellations started to mount. The situation worsened over the summer, as bouts of disruptive weather left passengers stranded and forced Transportation Secretary Pete Buttigieg to call a meeting with airline CEOs.
While autumn was mostly free of disruptions, the year ended with a winter storm that brought airline travel to a standstill, especially at Southwest Airlines.
“The days of flying being fun are long over,” said William McGee, a senior fellow for aviation and travel at the American Economic Liberties Project, a nonprofit, nonpartisan, anti-monopoly group. “People will settle for noneventful.”
Not everyone agrees on the nature of the problem. According to Scott Mayerowitz, executive editor of The Points Guy travel website, on any given day, the current system is mostly fine.
“It’s only these few instances when things go wrong, that they go horribly wrong, and it causes severe problems for such large numbers of people,” he said. “And it’s horrible if you’re one of those passengers — but the next week, everyone moves along and the system works.”
Still, many agree about the short- and long-term challenges that plague the industry. Airlines will soon be hobbled by a lack of adequate staffing, something United’s Kirby alluded to. On a more distant horizon are modernization and market reform efforts that analysts fear might be stymied by political obstacles.
Those issues are likely to linger as long as Washington gridlock prevails, analysts say.
As the pandemic swooped in, air travel was among the industries most affected, as more than 90% of flights were grounded. Bloomberg News calculated that some 400,000 global airline industry workers were set to lose their jobs as a result of the pandemic.
Today, labor shortages exist throughout the economy, but the problem drags on in the air travel sector, where more extensive employee training is usually required.
“The question on everybody’s lips is, ‘Where have they all gone?’” said Tim Clark, president of Emirates Airline, at an event this summer, as reported by The Wall Street Journal. “There are hundreds of millions of people that have disappeared from the labor market.”
First and foremost among the airline industry’s labor issues is a pilot shortage. By one estimate, some 12,000 more pilots are needed. Even before the pandemic, pilots were retiring in droves as the baby boom generation hit the federal mandatory pilot age limit of 65.
“The pilot shortage for the industry is real, and most airlines are simply not going to be able to realize their capacity plans because there simply aren’t enough pilots, at least not for the next five-plus years,” United’s Kirby said on a quarterly earnings call last April.
But pilot unions have resisted calls for reform. Some fear that proposed changes could jeopardize safety. Others worry that with younger, less experienced pilots among their ranks, some collective bargaining leverage would be lost.
On its website, the Air Line Pilots Association, the nation’s largest pilots union, calls the shortage a “myth” and accuses airline executives of trying to maximize profit — in part by refusing to reduce their flight schedules.
But even ALPA acknowledges more measures could be taken to “maintain a robust pilot pipeline,” like helping students pay for flight training and subsidizing loans to cover it. Having more pilots available to work would 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 its carriers “have been working diligently to address operational challenges within our control by hiring additional staff and adjusting our schedules to improve reliability.”
Sen. 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 flights, and nine airports have lost service completely as a result of the age limit.
“Under this legislation, approximately 5,000 pilots would have the opportunity to continue to fly over the next two years, and in turn, help keep communities connected to the air transportation system,” association senior director Drew Remos said, according to CNBC.
Outdated technology and infrastructure
There is near-universal agreement that the infrastructure underpinning segments of America’s air travel system is outdated and vulnerable. That was on full display at the start of the year when a technology issue at the Federal Aviation Administration caused all planes to be grounded. The agency said it has continued to investigate, but Washington lawmakers said the glitch proved that more drastic changes were needed.
Rep. Sam Graves, R-Montana, said the incident highlighted “a huge vulnerability in our air transportation system.”
“Just as Southwest’s widespread disruption just a few weeks ago was inexcusable, so too is the DOT’s and FAA’s failure to properly maintain and operate the air traffic control system,” he said.
The Southwest incident, too, was blamed in part on Southwest’s aging scheduling system, which requires crew members to call into 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 country’s air traffic control system, one part of which still uses paper strips to coordinate flight schedules. Reuters recently referred to that aspect as “long-ridiculed.”
“There’s a great deal of work needed to reduce the backlog of sustainment work, upgrades and replacement of buildings and equipment needed to operate our nation’s airspace safely,” 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 lay this on the fact that we are not giving them the resources, the funding, the staffing, the tools, the technology they need to modernize the technology system,” he told CNBC’s “Squawk Box” recently.
“Hopefully, this will be the 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 Transportation Department already gets plenty of funding — and that the money is being misspent.
“I would like to see an audit of where the money is,” Hudson told NBC News. “DOT has gotten an enormous increase, and either it’s not being spent, or it’s being spent on other things than what’s causing cancellations.”
But even this issue comes back to staffing. The FAA said in 2020 it was more difficult “to hire technical talent as quickly and effectively than in the past.”
Lawmakers across the political spectrum have called for an alternative solution: privatizing the air traffic control system. It’s a step that other countries have taken, including Canada, whose NAV Canada system has been a privately operated nonprofit company since 1996.
“It’s the gold standard of air traffic systems in the world,” said Scott Lincicome, director of general economics at the Cato Institute, a libertarian think tank. “It is efficient, innovative, and it is a nonprofit private company regulated by the government,” Lincicome said, adding: “It’s a great example of what the US system could be if we could surmount our difficulties.”
But Lincicome said there is entrenched resistance to that solution — and to many other practical ones put forward 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. “It seems like a very tough nut to crack.”
In the meantime, flyers in the U.S. will remain at the mercy of their individual airline. Already, U.S. airline 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 euros when there’s a flight disruption of more than three hours that’s not outside an airline’s control, travelers on U.S. flights are entitled merely to a refund — and even that can be hard to obtain.
“It’s difficult to claim compensation from airlines,” Napoli said of airline passengers in the U.S. “They don’t have great protections.”
Mayerowitz, with The Points Guy, said carriers would likely 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 by travelers to pay an extra $20 or $30 for each ticket in order to have these delay protections that they may or may not reap the benefits of” if their flight ends up being on time.
Airfares have been in a more or less steady decline since the mid-1990s, when adjusted for inflation. Compared with a ticket that cost an average of $558 in 1995, airfare 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 U.S. becomes so difficult that lawmakers may finally take more comprehensive action.
“It’s nearing a breaking point, and this is not a one party issue,” McGee said. “There’s a general sense in the country; most Americans realize something is really wrong with this industry.”
But Mayerowitz said that 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. Air travel should be predictable and consistent, and you shouldn’t have to wonder if air traffic control is going to be working today as you head 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 holidays.”