Airlines' Comeback: complete with cancellations, delays, and rising fares
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It's a party in the TSA... The number of people passing through US airport checkpoints is back to 75% of 2019 levels, the highest since pre-lockdowns. A year ago, they were barely at 25% of pre-pandemic levels. Airlines are enjoying a travel comeback as Americans get vaccinated — but travelers are getting a side of problems along with their roasted peanuts.
Precheck won't help you... when the pilot is MIA. Airlines are dealing with a shortage of pilots and airport workers. Now that demand is back, airlines can't flip the pilot switch so quickly. Pilots who were furloughed or took leaves of absence during the pandemic have to be retrained — so do other workers, including those who check planes. The shortage is magnified when bad weather and other disruptions come up. That's resulted in:
- Delays: Nearly 10K flights were delayed in the US on Sunday. Southwest had the most delays, with 30% of flights running late.
- Cancellations: American Airlines had significant cancellations on Sunday, and proactively canceled 1K flights set for July.
Prepare for bailout backlash... Besides the pilot panic, airlines are enjoying their comeback. And now they're raising prices: flight prices jumped 7% in May from April, and were up 24% from May of last year. Consumers are angry about the cancellations, delays, and higher prices. But they could be angriest when they remember that airlines got a $50B bailout from taxpayers. Politicians sense public support for imposing additional costs on bailout recipients. That could include forcing airlines to keep flight schedules they say they can’t maintain, or raising wages.