Airline staff shortages expected to last into 2023

Airline staffing shortages, which are already disrupting summer vacation plans, could extend well into 2023, some industry officials say.

The big picture: Airlines had two years and billions of dollars in government aid to make sure they were ready for passengers to return to the skies after the pandemic. But demand has snapped back so quickly that they don’t have enough people to fly the planes, serve the passengers or unload their bags.

The result: flight delays, cancellations and lots of frustration for travelers.

The disruptions are happening everywhere as borders reopen between places like the U.S., Europe and Australia, unleashing two years of pent-up demand.

• The staffing crisis is so bad that some airports including Amsterdam’s Schiphol and London’s Gatwick airports are scrapping flights and limiting passenger numbers during the peak of the travel season.
• The CEO of Malaysian Airlines warned it may take as long as 12 months for labor shortages to ease, Bloomberg reports.
• “There’s a supply and demand imbalance right now,” American Airlines CEO Robert Isom said earlier this month. In the U.S., he said, “it really is within the regional carrier ranks.”

Flashback: Early in the pandemic, airlines urged many senior pilots, flight attendants and other employees to take buyouts or early retirements, anticipating the industry would shrink and take some time to crawl back.

• The federal government’s payroll support program ended in October 2020, forcing tens of thousands more airline employees to be furloughed — only to be recalled three months later when Congress passed another COVID relief package.
• But bottlenecks in training and recertification are keeping some of those crew from getting back into service, said Dennis Tajer, a spokesman for the Allied Pilots Association, which represents American pilots.

What’s happening: U.S. airlines are offering bigger paychecks in the hopes of easing the labor crunch.

• American’s regional carriers Piedmont and Envoy — which both fly under the American Eagle brand — gave big raises to their pilots, including a temporary 50% pay hike through the end of August 2024.
• Isom said the airline will offer bigger raises for its 14,000 mainline pilots, too.
• Higher pay rates at regional airlines could put pressure on major and mid-tier carriers, writes Skift.com, a travel industry publication.

Yes, but: higher labor rates could also accelerate the phaseout of smaller regional jets, leaving some smaller markets unconnected to large hub airports.

Meanwhile, Alaska and United both opened flight training schools earlier this year and are offering financial aid to help defray the $70,000 cost of becoming a pilot.

• Still, the new programs won’t produce certified crew members for several years, Skift notes.

The bottom line: Despite the staff shortages and enormous economic headwinds, revenge travel demand remains strong, giving airlines hope for a modest return to profitability this year.

• “Never in my 30-year career have we seen demand that is as robust as it is,” Alaska Airlines CEO Ben Minicucci told Axios.