There will be 'many unhappy passengers' this summer, aviation analysts say. Airline CEOs should rethink operations and be transparent with customers.
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- Analysts say flyers will see additional delays and cancellations this summer.
- They said airline CEOs should take steps now to lessen the challenges.
- Boosting transparency with customers and investing in new technology are crucial steps, they said.
On a good day, flying is often just tolerable. But delays and cancellations over the July 4 weekend could make it just terrible.
A bumpy Independence Day holiday would complete the trifecta after a rough Father's Day and Juneteenth weekend and a delay-filled Memorial Day break. Staffing shortages and supply-chain issues have marred the getaways many Americans had been pining for after two summers of pandemic hardships.
Analysts told Insider that these messes — in which overwhelmed carriers have canceled thousands of flights — plus the forecasts for July 4 mean travel turmoil is a trend, not a blip.
"Bleak" was how the veteran airline executive David Banmiller described the next few months for the industry.
Helane Becker, a senior research analyst who covers airlines at the investment bank Cowen, agreed. "There are not enough people working to handle the number of people flying," she told Insider.
This problem isn't going to be solved overnight, which could make the next few high-demand months more difficult than usual, said Nawal Taneja, an airline consultant with more than 60 years of experience in the industry who's published more than a dozen books on the sector.
Experts said that to mitigate the chaos, airline CEOs should reassess their operations, invest in new technology, and step up communication with customers. They said leaders outside of commercial aviation can rely on many of these principles should crises envelop their own industries.
Reassess operations
"There will be many unhappy passengers this summer," said Adam Gordon, a managing director of Boston Consulting Group's airline division.
According to the industry expert, CEOs of the nation's air carriers should recognize the tough spot they're in and be realistic in setting the number of flights they run this summer. Though airlines have already trimmed their schedules, they might need to cut more, Gordon said.
United Airlines said last week that it would slash about 12% of its flights out of Newark, New Jersey, one of its hubs, this summer beginning with the July 4 weekend. And JetBlue Airways — which is battling Frontier Airlines to acquire a rival budget carrier, Spirit Airlines — said in May that it would halt some routes at least temporarily following episodes of delays and cancellations.
Major airlines laid off tens of thousands of workers over the past two years as the pandemic sent demand for seats plunging. The industry is facing shortages in roles such as air-traffic controllers. Compounding this is the aftermath of airline-employee buyouts during the pandemic; unplanned employee time off because of COVID-19 infections or workplace stress; and supply-chain issues.
"The only lever they really have to tackle this operational risk over the next few months is to reduce the amount of flying so that the labor and the infrastructure is there to support the schedule," Gordon said.
While reducing flights is likely to drive prices up, Gordon said the alternative is leaving thousands of passengers with cancellations or major delays. That would be hard to stomach for many passengers, as airfares have jumped by at least 20% from where they were before the pandemic.
"Airline leaders need to be realistic about what can actually be flown," Gordon added.
Invest in technology
Taneja said companies are also dealing with outdated models for forecasting demand.
Prepandemic patterns that analysts used to predict consumer behavior and demand aren't as reliable anymore, Taneja said. COVID-19 waves, government regulations like border closings, and changing consumer behavior are making it harder to forecast demand.
Taneja said that to better predict how customers are choosing flights, airlines should invest in data-sharing operations with other airlines and new technology to render demand forecasts in a matter of days or weeks instead of months.
"We have to look at how we can use new data and how we can better use existing data," Taneja said. "We need to invest in new technologies and machine learning."
Be transparent with customers
While putting new technology in place could take some time, communication is instant. Faced with difficult conditions, airline leaders should do their best to communicate more with passengers who are likely to become frustrated, Gordon said.
"Airline CEOs should think about how they can be radically transparent with their customers and their employees and really make sure people understand what's happening," he said. "They should also make sure that they're taking whatever steps they can to take care of the customers."
from Business Insider https://ift.tt/A5j8f0F
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