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Tom Kool

Tom Kool

Writer, Safehaven.com

Tom majored in International Business at Amsterdam’s Higher School of Economics, he is now working as news editor for Oilprice.com and Safehaven.com

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Airlines Could Recover, But Crew Remain Elusive

Airlines Could Recover, But Crew Remain Elusive

Hurt by the pandemic, the leisure industry has hoped air travel would regain some lost momentum this summer. It wasn’t disappointed. Passenger interest is surging, but along with it problems with labor are emerging

As it turns out, planes can’t fly on demand alone, and a labor shortage is now threatening recovery before lift off.

American Airlines is canceling hundreds of flights for at least the next few weeks as a result of a combination of factors, largely driven by a shortage of crew.

The airline said demand for summer travel came quicker than expected, making for a difficult mix with labor shortages and bad weather. The company said 1% of its operations have been cut for July but many are targeted cancellations in markets where customers can get on another flight

Over the past weekend, American Airlines had 300 cancellations, or 9% of its mainline schedule, and the company is projecting up to 80 flight cancelations per day going forward until the end of July.

According to CNBC, an internal company list showed about half of the canceled flights were because of unavailable flight crews

Previously, travel experts claimed that for the next 12 months, Americans would travel mostly locally. Some surveys found that 22% of Americans had switched to driving from flying.

However, thanks to Covid vaccinations, reduced travel restrictions and reductions of new cases, Americans are now ready to take their first vacations in more than a year. U.S. airlines expect to fly approximately 90% of their 2019 system seat capacity this summer. 

Even higher ticket prices haven’t scared off domestic tourists. According to the booking app Hopper, airfares within the U.S. are up 12% since April and will continue to rise up until late August. As for international flights, they are already up 8%. 

As for the industry, experts previously warned that airline travel would be slow to recover. 

According to the report from Moody’s Investor Services from last July, the airline industry will continue to suffer well into 2023 because of the current coronavirus pandemic

However, looking at early summer bookings so far, that recovery might come sooner. All the airlines need to do is to produce more pilots. 

Last year, American Airlines lost $9.5 billion--more than a quarter of the $35 billion loss by all U.S. airlines--and fired 1,200 of its 15,000 pilots.  

Billions of dollars in federal aid kept airlines afloat last year. Whilte they did manage to keep up a certain level of service, thousands of staff members were place in labor purgatory. 

Major U.S. airlines were offering voluntary exit packages in an effort to slim their workforces, and tens of thousands took temporary leaves. Some estimates say that as many as 10% of U.S. pilots took early retirement during the pandemic. Chances are, they won’t be coming back to fulfill anyone’s post-COVID summer vacation dreams. 

It is still unknown what non-retired former pilots plan to do with their skills. According to a December report by The Wall Street Journal, one furloughed American Airlines pilot became a truck driver

According to a study by the consulting firm of Oliver Wyman, the pandemic-paused pilot shortage will be felt again in coming years.

“In North America, with an aging pilot population and heavy use of early retirements, the shortage reemerges quickly and is projected to reach over 12,000 pilots by 2023—13 percent of total demand,” the report says

Nearly all US airlines have already announced hiring plans for 2021.  Delta Airlines announced it will hire 150 pilots per month, and American Airlines plans to hire 350 pilots by the end of the year, while some smaller carriers are sweetening the deal with various bonuses and benefits.

Worker shortages are plaguing many other industries, as well; most notably, the restaurant industry. Many pre-pandemic restaurant industry workers opted to rely on unemployment benefits. Others went back to school, and still others left the industry altogether in search of something more pandemic weathering.

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