(Bloomberg) -- Travelers in Europe are paying ever more for a plane ticket and yet have less chance of actually making it to their destination.
From London to Amsterdam to Berlin, chaotic scenes are playing out at airports as the fine-tuned interplay between check-in desks, security personnel and baggage handlers unravels. While Asia’s travel industry is still navigating Covid-19 and the US suffers from a shortage of pilots, ticket pricing and cancellation data show Europe is where the turmoil has converged to inflict maximum pain on consumers.
Europe had more than double the cancellations of US carriers between April and June, according to data from flight tracking company RadarBox.com. Axed flights in June — the start of Europe’s peak summer season — totaled 7,870 for departures from Germany, the UK, France, Italy and Spain, almost triple the number in the same period in 2019, aviation consultancy Cirium says.
Meanwhile, fares on summer routes such as London to Alicante in Spain this week are more than three times higher than the same week last year, according to data from Kayak.com. Prices from Paris to New York have tripled since March 2019.
The breakdown highlights how a faster-than-expected recovery in air travel has clashed with a massive staffing shortage after deep cuts during the pandemic. Instead of a roaring comeback, the global aviation industry is stumbling, unable to rapidly fire up operations again from the worst travel slump on record and making what in the past might have been a routine trip more of an odyssey.
The malaise is being exacerbated by strikes across the continent as rampant inflation leads to higher pay demands.
France’s civil aviation authority ordered a reduction in flights out of Paris Charles de Gaulle on Thursday due to a walkout by firefighters. Ryanair Holdings Plc cabin crew in Spain, Portugal and Belgium staged a three-day strike last weekend, later joined by colleagues in France and Italy. More industrial action is scheduled as the continent enters the peak vacation season.
Deutsche Lufthansa AG Chief Executive Officer Carsten Spohr cautioned that things probably won’t return to normal until the end of the year, but the risk is the turmoil undermines the recovery by deterring bookings.
Virgin Atlantic Airways Ltd. CEO Shai Weiss, whose company has canceled only a handful or flights, warned airlines and airports against pushing families and businesses to ask if they really need to travel.
It’s a question Julius von Jagow may ponder. He was booked on a June 29 flight from Montreal to Munich via Frankfurt when he got word that the final leg had been canceled. Lufthansa said he could switch to a train in Germany at no charge, but United Airlines Holdings Inc., which operated the trans-Atlantic part of the trip, instead put him on a flight via Washington and Brussels.
Then the Brussels-Munich flight was also canceled, forcing a rerouting via Zurich. When the plane finally touched down in Germany on June 30 after a 26-hour ordeal, passengers were stuck in the cabin in sweltering heat for an hour because their bags couldn’t be unloaded for lack of handlers on the ground. “It’s total chaos, total breakdown, nothing works,” said von Jagow, 45, who was returning from a business trip.
Indeed, recent weeks have been dominated by images of lines of people snaking outside terminal buildings in Amsterdam, groups camped out in departure halls in Frankfurt and piles of misplaced luggage in London. Alternative modes of transport for shorter hops are also looking less than alluring, with the UK gripped by rail strikes and a jump in the cost of driving after a surge in gasoline prices.
Some airlines are getting creative about how to process passengers waiting to check in their luggage. EasyJet Plc said it’s offering a free-of-charge bag drop the night before travel at Berlin’s main airport from July 1, ahead of the week that schools close for summer. The service covers about 30% of the UK discount carrier’s daily flights from the hub.
Governments are taking note and taking action, as are financial markets. Investors are selling airline bonds as an industry that was supposed to profit from pent up demand for travel instead contends with upheaval again. Debt of companies ranging from EasyJet to Lufthansa is trading just above levels considered “distressed.”
Germany said it will help bring in airport security workers from places like Turkey to fill the void left by people who quit their jobs during the pandemic. In Ireland, the Transport Ministry is putting the army on standby to help alleviate staffing issues at Dublin Airport.
UK Transport Secretary Grant Shapps announced on Thursday a plan to tackle disruption, while warning that “it’s now on airports and airlines to commit to running the flights they’ve promised or cancel them with plenty of time to spare.”
Companies have complained that they were unable to properly prepare for the travel rebound because of a confusing policy on Covid curbs, the lengthy background checks on recruits and the limited aid available to them at the height of the pandemic. But governments are having none of it, saying it’s ultimately up to the industry to put their operations in order after receiving huge subsidies to make it through the pandemic.
“What’s unacceptable is for companies to create problems and then to dump them at the government’s doorstep,” German Labor Minister Hubertus Heil said on June 29. “It’s now their move. We’ve created the framework.”
Lufthansa cut around a third of its workforce to 100,000 people after travel restrictions enacted to slow the spread of coronavirus, leaving it short of cabin crew, ground staff and pilots as demand for travel comes roaring back.
“This summer, we need to tough it out together,” CEO Spohr told staff in a memo after Lufthansa revealed that it was extending cancellations for July and August from 900 flights to 3,100, equating to around 4% of its capacity during the summer peak.
Part of the chaos now wrought on the industry comes from the pandemic fallout, Spohr said. Faced with the prospect of being wiped out by global groundings, airlines took extreme measures to keep their businesses together, he said. “Did we drive some savings too hard? No doubt,” Spohr said.
An insufficient number of ground handling workers is among the biggest causes of delays and cancellations. But replenishing depleted staffing ranks has been a slog. That’s not surprising considering the nature of the work. Ground crew often have shift times that don’t suit family or social life, with some hours extending deep into the night. It can be physically demanding, and pay levels hardly compensate for the discomfort.
German ground staff typically make about 20,000 euros ($21,026) per year when starting, a sum that’s easily matched in jobs that are less tough with more regular hours. Germany’s unemployment rate is close to its lowest level since reunification in 1990, meaning ground handling companies face fierce competition for staff from almost all sectors of the economy.
“Everyone’s asking, where have they all gone? And the answer is always: Amazon,” said Tim Clark, president of Emirates, the Dubai-based long-haul airline. “The airports are just folding, stopping.”
Just a few months ago, airlines and airports appeared set for a bumper summer as a yearning to reunite with family or spend a week at the beach unleashed a flood of bookings. UK airports saw passenger numbers jump almost 35% every month from the start of the year through April, according to data from the Civil Aviation Authority.
As early as March, however, warning signs around the industry’s ability to cope with such a rapid rebound in demand were visible.
British Airways hinted at the trouble ahead, telling staff in a memo late that month it intended to trim capacity through the end of May after struggling to get new hires through an eight-week process of security vetting in time to join the front line for the spring timetable ramp-up.
While unexpected, the issue appeared to be a one off, with BA having fired 10,000 staff in order to slash costs early in the pandemic rather tapping a UK government program to put them on furlough.
Such hopes were dashed when school holidays in the runup to Easter brought chaotic scenes across several UK hubs. Disruption was worst at Manchester Airport, where a lack of security staff led to lines of passengers snaking from the terminal as far as car parks and numerous people missed their flights.
Others began arriving up to eight hours early to be sure of getting aboard, exacerbating overcrowding, while a shortage of baggage handlers left luggage languishing long after planes had touched down, prompting many to head home and return for their possessions the following day.
The crisis quickly gathered pace, with delays and last-minute cancellations becoming commonplace across airports including London Gatwick, Birmingham and Bristol. Angry Britons vented on social media — and some went further. Returning holidaymakers at Manchester climbed through a carousel curtain in a bid to retrieve stranded bags, leading armed airport police to intervene.
EasyJet and tour operator TUI AG were among operators to slash capacity, while BA doubled down on its cuts to around 10% of previously scheduled flights at its London Heathrow hub through October. Gatwick led the way among airports, eliminating up to 100 flights a day in July and August by imposing a cap on aircraft movements.
British massage therapist Laura Haywood White had her EasyJet flight from Gatwick to Athens in mid-July cancelled. Rebooking options on the company website showed no availability. She managed to rearrange the journey, part of a 1,100-pound ($1,330) break at a yoga retreat on the Greek island of Paros that was a 50th birthday present from friends.
She has now booked a night in Athens after travelling a day earlier than planned and rescheduled her ferry to the island. “I almost gave up and bought a new ticket, which it felt like I was being bounced into doing,” said Hayward White. “This was meant to be a relaxing break, but so far it’s been the exact opposite.”
While continental Europe had seen some indication of a tight labor market impacting services, with airports in Dublin and Berlin blaming staffing issues for flight cancellations, the situation hadn’t appeared to be as acute as in the UK. That was until Amsterdam Schiphol shocked the industry by announcing on June 16 that it would cap passenger numbers about 20% below usual levels.
The airport, one of Western Europe’s four elite hubs alongside Heathrow, Paris Charles de Gaulle and Frankfurt, had seen some cancellations from May, but nothing to suggest something so dramatic. The Dutch arm of Air France-KLM, Schiphol’s biggest carrier, said the curbs would be “highly detrimental” to a business model that’s disproportionately reliant on transferring intercontinental travelers via closely connecting flights.
The staffing shortfall alone would have been enough to throw the recovery off course. But the upheaval has taken on a new dimension as the spiraling cost of living unleashes an outbreak of strikes across the sector.
With travel firms desperate to cash in on their first uninterrupted summer in four years, unions are seeking to capitalize, pressing demands for pay increases, better working conditions and improved benefits — partly in the knowledge that the window for doing so may be short should escalating costs push the world into recession.
Having escaped the worst of the original disruption through its focus on smaller airports, Ryanair is in the firing line after being force to unionize only after a rostering mixup in 2017 led 20,000 flights to be scrapped and gave an earlier boost to employees’ bargaining power.
While Europe’s biggest discount airline said disruption so far was minimal, its Spanish workers are striking again Friday, the same day employees at EasyJet will begin nine days of staggered walkouts in the country. Brussels Airlines pilots and cabin staff have also staged walkouts, while BA check-in staff based at Heathrow have voted for industrial action, with dates to be set shortly.
“It’s a unique combination of circumstances,” said John Strickland, an aviation analyst at JLS Consulting. “There’s such strong resurgent demand after the pandemic, which airlines would ordinarily be doing their level best to grab. But it’s being matched by a crisis of resources and manpower.”
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