How do airline bosses and the International Air Transport Association (IATA) rate the current delays and cancelations in air travel, caused by staff shortages? AirInsight asked some of them from across the globe for their views at this week’s Annual General Meeting in Doha (Qatar). We got some interesting observations. Are labor shortages and disruptions temporary or an iceberg coming? London Heathrow or Gatwick, Amsterdam Schiphol, Madrid Barajas, Belfast, Frankfurt, Hamburg… All well-known European airports recently hit the headlines for the wrong reasons. Long queues of passengers, frequently lining up for check-in and/or security checks for over four hours, have apparently made flying a grueling experience. And when they have got through, it’s not uncommon to be confronted with a last-minute cancelation, either imposed by the airport or caused by the airline unable to operate the flight. The common denominator in this post-Covid chaos is staff shortages. At airports, where baggage handlers, security personnel, or airline ground staff with low-paid jobs have not returned to aviation after having faced furloughs and redundancies when wave after wave of Covid 19 kicked in. It’s been the same in aircraft cabins and cockpits. And even in control towers and at air traffic management centers, where highly-qualified and highly-paid staff works, staffing issues are frequent. Either caused by Covid-related absences or simply because people aren’t available. Various airports in Europe have been forced to take drastic steps and reduced capacity during the coming summer peak, which not long ago was seen as the period of the year when airlines would earn good money to make up for the losses in recent months and years. For example, Amsterdam Schiphol will reduce daily capacity in July and August by often some 25 percent, forcing airlines to cancel flights as the airport with current staffing levels is unable to handle more. Gatwick also put a cap on flights and, as a result, its main carrier – easyJet – has slashed the network. It’s the same in Germany, where Lufthansa is forced to cancel 900 flights in July because of the shortages, and Eurowings is faced with instability in its operations. Disruptions are isolated, says Walsh The media headlines in Europe make you think that the airline industry is about to collapse this summer and in the coming months and that this is a worldwide issue. But that’s not the view of IATA Director General Willie Walsh: “There isn’t widespread disruption through the network. Disruptions are isolated, but where they are, we have seen measures to address them. There are certain airlines at certain airports that are facing challenges. It isn’t widespread across the world, it’s not every airport, it is not every airline, it is not every day of the week, it is not every week of the year. We will adjust and find solutions to these problems. I see them as temporary, business as usual challenges that we are facing. And let’s face it, these challenges are insignificant to the challenges we have faced in the past two years.” IATA Director-General Willie Walsh (left) and Qatar Airways CEO Akbar Al Baker during the closing press conference of the Annual General Meeting in Doha on June 21. (Richard Schuurman) The IATA Director-General makes another point: “It is interesting actually that three of the airports that are highlighted by us because of significant increases in airport taxes – Schiphol, Heathrow, and Dublin – are the ones that have experienced the biggest disruptions in recent weeks. Which really leads you to question the management teams at these airports. They have implemented massive cost increases at a time when they are incapable of delivering a basic product. I will continue to call upon these airports to get their act in order. This is a case of a mismatch between manning levels at the airport and demand and they are disappointing their customers at a basic level.” Problem not unique to aviation Willie Walsh adds that aviation isn’t the only industry to face staff shortfalls: “The situation is not unique to the airline industry. Airlines have not been able to offer the same flexibility to their workforce as other companies. Flexible working practices have been introduced through the pandemic. It is probably an additional challenge but outside the aviation industry they are experiencing some challenges as well.” Emirates President and CEO Sir Tim Clark agrees: “Manpower shortages are nothing peculiar to the airline industry, it is across the global economy, isn’t it? Automotive, hospitality, aerospace, all are suffering shortages. The question on everybody’s lips is where have they all gone? Wherever I travel, I see that. I was in Australia last week, in Germany and France before that, to the UK. There are major distortions to the supply of labor. Labor supplies are driven by markets and they moved away to where to market is. The pandemic has centered an earthquake through the economy of a 9 or 10 on the Richter scale. What you are getting now are the aftershocks and there are a few of those. The best way everybody can deal with it is in a kind of collegial manner as you can: come together and sort it out rather than seeing each other off, playing games, price increases, that’s not going to cut it. When have going to find how best to deal with it and we will get it back. When, I am not altogether sure, but in the next eighteen months we will have some difficult times.” Emirates President and CEO Sir Tim Clark isn't impressed with a last-minute request from London Heathrow to cancel a fully-booked A380. (Richard Schuurman) Tim Clark observes: “Some (workers) are lost to the aviation industry, but they are also lost to other industries. If perhaps you were a baggage loader or a waiter in a restaurant, these people might have chosen different jobs. Or they may have been well looked after by their governments and sent home for nine months, two years, enjoying life. Eventually, they have to go back to work because they have to earn money. I think you see a little bit of that at the moment. There will be a restoration of the supply of labor to the places and markets that need them, we just got to tough it out for the time being.” Qatar Airways Group CEO Akbar Al Baker has his own explanation for staff shortages: “I do realize that in other regions of the world, there is shortage because people have gotten used to the bad habit of working from home. This has given them the feeling that jobs are available now that they can work remotely and don’t need to go to an industry that really needs hands-on people. I think this challenge will stay with the industry for some time to come.” No issues at Qatar and United Qatar Airways itself hasn’t experienced any staffing issues. On the contrary, says Al Baker: “We can’t see any labor shortages in our company and region. We are actually inundated with applications. To give you an example: we are in need of additional 900 pilots for our growth plans, we had 20.000 applications. In one session for cabin crew, we had 25.000 people that came to the open day. So you can see the interest we are generating as an airline.” It is the same picture at United Airlines. While various US airlines have had to cancel hundreds of flights following ground staff shortfalls with Omicron symptoms, United CEO Scott Kirby says his airline is in a strong position: “We at United Airlines don’t have staff shortages. We don’t have issues, we are able to hire. But… a lot of the infrastructure does. Airports in Europe, it’s crazy some of the staffing shortages they are having there. In the US, the biggest issue frankly is that the air traffic control system is understaffed. That in particular impacts everywhere but Newark and the Jacksonville center are two with the most issues: we have days where it was a perfect, blue-sky day, but air traffic control was staffed only fifty percent, so the capacity is cut by fifty percent. And those guys are working their tails off by the way. But we have fifty percent staffing at the busiest airspace in the world, so we are pleading with the FAA to solve these issues.” United CEO Scott Kirby says his airline has no labor shortages, but those at air traffic management are causing disruptions. (Richard Schuurman) Well-publicized is the shortfalls in pilots in the US, which in particular have hurt regional carriers. Again, United Airlines seems immune to these problems, says Kirby: “We figured out before the pandemic that there was a pilot shortage coming and started taking steps to resolve it for ourselves. We have close to 200 regional jets that are grounded now and I don’t expect they will ever again. We opened an aviation academy, we got a deal done with pilots unlike others, so we don’t have a problem hiring pilots. But the reality is that in the US, in the last decade, there were between 5.000 and 7.000 pilots produced each year. We came into the year with airlines’ desires to hire 13.000 and they hired 12.000 actually. But the supply hasn’t changed. It is a real issue for regionals. It is now impacting low-cost carriers. Because the reality is: if you are a pilot and you come to United, you can have a much better culture and company that you are proud to work for, you can have pay rates that are always at the top of the industry, and you can get upgraded to captain as fast at United airlines as at a low-cost carrier now and you can fly widebodies.” JetBlue CEO Robin Hayes says: “One of the challenges in the US is pilot hirings and the view that over the next few years, there will not be enough pilots. The good news is this is something we identified a few years ago and efforts are on their way to improve the pilot hiring supply. I am confident that over the next two or three years, we will get back to the new normal. Outside of the pilots, people are coming back to the industry. We are definitely seeing that. View from Down Under From elsewhere in the world, you get different perspectives on staff shortages. Let’s hear from Australia and Qantas CEO Alan Joyce: “The issues we are having in Australia are nowhere near severe as you are seeing in North America or in Europe. We have had, like everybody, teething problems in starting up again. When you have an airline in hibernation for two years, it does take a lot of effort to get all the moving parts working in harmony again. That’s everything in the supply chain, that’s the manufacturers, that’s the airports, that’s all the companies like catering and ground handling. I think it will take a little bit of time at different locations at different speeds.” “But there is still huge interest in working in the aviation industry”, says Joyce. “We are creating 2.500 roles to meet our future schedule, we had 25.000 applicants for those 2.500 jobs. Our problems are a little bit different from others. We don’t have a problem with pilots, we are recruiting cabin crew, and we have some areas like ground handling that have had high levels of sickness because of Covid. You get the complexities of Covid and sick leave on top of people leaving the industry and that has caused us the short-term problems.” “Our international schedule is only operating one or two flights a day, so it is a lot easier to manage. For us, the logistical challenge is domestic operations where you have hundreds or thousands of flights a day. So getting our on-time performance right is not where we wanted to be, but we have a plan over the next few weeks to get that back to where it was pre-Covid. We had a similar problem with the call centers. In April, we have our wait times blowing out to two to five hours. Last week, that got down to three minutes. So we can fix these problems when we focus on them.” In Asia, Korean Air hasn’t had any staffing problems either, despite the country having gone through a deep crisis during the first Covid-wave. President and CEO Walter Cho says: “We don’t have any workforce problems, because we never let go of anybody. We maintained all our staff and once an aircraft is ready, everybody will come back.” Not all airports have troubles. Doha's Hamad International Airport in Qatar is busy, but there are no staff shortages and unacceptably long queues. (Richard Schuurman) Troubles when going to Europe But when flying to airports with troubles, Korean is confronted with operational issues, says Cho: “When flying to airports with problems, we add extra ground time and ask customers to show up at the airport earlier. Although we do have problems with ground handling, catering, and all the other services, hopefully, we will come back soon. Most problems are in Europe. In the US we haven’t seen too many problems.” Dubai-based Emirates has escaped serious operational problems too, says Tim Clark: “So far we haven’t had to cut back out flights, with the exception of today (June 20), where Heathrow told us late last night to cancel one of our A380s, which was full both ways. That is not what I call good planning. That really does affect us. But all the other places we have been managing to get through. It isn’t without difficulties. We flew one plane to Miami in the early part of this year: when it arrived, there was one loader and one check-in agent.” In Canada, WestJet’s new CEO Alex Hoensbroech confirms that his airline is experiencing some issues coming from staff shortages: “We have challenges at the airline level, even larger challenges at the supplier level as the airports, but the worst challenges are with government agencies like border control and security.” “The current recovery is the largest recovery in aviation history. We are tripling our capacity from last year to this year. We as Westjet are actually doing pretty well in terms of flight attendants' availability. There are of course challenges when single flights have to be canceled but not at a large scale.” United’s Scott Kirby agrees: “The recovery happens a lot faster than anyone expected. Which emphasizes the need to plan far ahead. We put a shutdown team together from all over the company, we kept that team together for the rebound because there were hundreds of things. And each small thing can lead to cascading problems. That way we avoided mostly the high-profile challenges that others have. Another lesson is that even when demand is robust, you have to go slow on capacity recovery. As exciting as it is, you can’t just overnight ramp the schedule up and do the right things for customers. We would be flying more today if we thought the system could handle it.” Mehmet Nane, Chairman of the Board of Turkish low-cost airline Pegasus and elected as the new IATA chairman of the Board for the next year, says: “The recovery started faster than we expected. There was a latent demand in the last three years, which converted into a revanche purchase. Everybody wants to fly domestic and international. Because we had no redundancies during this two-year period, we are able to recover well. Of course, there is some rustiness at some sides, like security, which we will be overcome in a few weeks’ time. From July 1, there will be a recovery in the entire industry.” Lufthansa sees the tip of the iceberg Whereas IATA’s Willie Walsh kind of downplays the current staffing issues as just a temporary problem, a more worrying view comes from Lufthansa CEO Carsten Spohr. In fact, he is the only CEO we spoke to in Doha who sees a deeper issue in Europe and Germany in particular. “In my view, this is just the beginning of a structural problem that we in Europe when it comes to blue-collar labor, due to the demographic developments. Most European countries have very restricted immigration policies. You are seeing now the tip of the iceberg in restaurants, aviation, and hotels of what we will be facing in the next years. How do we get access to enough labor in markets with shrinking populations? This is something politicians have to look at.” Lufthansa CEO Carsten Spohr is worried that current staff shortages are the tip of the iceberg of a huge demographical problem, which could impact Lufthansa's operations like here in Frankfurt. (Richard Schuurman) Spohr says: “Of pilots, I am not worried about. We still have a few hundred pilots at Lufthansa that is not working – formerly with Germanwings and A380 pilots that have not been retrained. Then we have a few hundred graduates from our flight school who are not yet hired or working and we are restarting the flight school. I am more worried about blue-collar labor at airports. In Germany, if you come to our country as an emigrant, you have to prove that you have a job but you also need to prove that no German was found for that job. I think this second rule we don’t need anymore. That’s something we have told the government: take that rule away, somebody should prove that he or she has a job and that should be enough to immigrate to Germany. But to prove that there is no German baggage handler, we don’t need that.” It is a public debate in Germany that has just started, says Spohr, but he is hopeful that something is starting to move at this front now. And not just in Germany, because the European Commission recently proposed legislation to make the entry of non-EU workers easier. The wrong headlines Yes, customer satisfaction is affected by long queues, flight cancelations, and chaos admits Willie Walsh. And in some cases, it will disrupt people’s holidays. But the airline industry is now getting headlines that other industries with problems seem to avoid. “I read a report of a journalist that he took twelve flights and two of them were delayed or canceled. I have taken 58 flights recently, and none of them have been delayed. I have taken the train several times: it is always been delayed. I went to Paris on the train, it was late, the Wi-Fi didn’t work, it was dirty, and the service was terrible. I don’t read headlines about that.” “You are hearing some CEOs saying that their ability to recruit and their ability to operate aircraft will be a significant factor in the rate at which they will expand beyond this. That is how this disruption will be addressed. It is important to reflect on the fact that every airline, every airport, every flight is facing these challenges. So let’s just relax a little. Yes, we have some challenges but it is not everywhere. We will see our way through the challenges that exist.”
