Who’s to blame for air travel chaos: Airlines or airports?

Sascha: [00:00:03] From Equity Mates media. This is the dive. I'm your host, Sascha Kelly. At Europe's airports, a summer of chaos, air travel chaos. We've all heard anecdotal reports or experienced it for ourselves. Luggage lost, flights cancelled and delayed hours long. Security lines and the general unrest from travellers is being directed at both airlines and airports. [00:00:26][23.6]

Audio clip: [00:00:27] It is great news that demand has returned, that passengers have both the income and the inclination to get back in the skies. [00:00:33][6.4]

Sascha: [00:00:33] Plenty of COVID impacted industries are returning to normal. Theme parks are reopening, cruise ships are sailing, and restaurants and bars are humming, but not air travel. Instead, we have airlines blaming airports and airports blaming airlines. All the while, travel is waiting in longer lines. It's Wednesday, the 27th of July. And today I want to know who's ultimately at fault, the airlines or the airports. And when can we expect this situation to return to normal? To do this, I'm joined for the very first time by my colleague here, Equity Mates Simon Harvey. Simon, welcome to the Dive. It's such a pleasure to have you. 

Simon Harvey: [00:01:14] Sascha, it's great to be here. I'm very excited for this episode on the aviation industry. My wife actually used to work as cabin crew. My best friend works in the air cargo industry and actually had a few years in the industry myself working in jet fuel supply. So it's definitely a topic close to my heart. 

Sascha: [00:01:32] So I'm and this is why I love having different guests on the drive. I had no idea that this was a topic that you knew so much about, so I'm really excited to dig into this with you today. It's a global phenomenon, isn't it? The world has slowly reopened from COVID cruise ships. As I said, sailing theme parks are back and restaurants and bars parks. But air travel has just struggled to restore its pre-COVID operations. So why don't we begin with a sense of the issues all around the world? Where should we start? 

Simon Harvey: [00:02:01] Well, as I said, there aren't many airlines or airports in the world that have avoided issues. So maybe the start of a bit of a game.

Sascha: [00:02:08] A game? Ah. 

Simon Harvey: [00:02:11] Every continent see massive delays. So have a guess which airline has seen the most delays.

Sascha: [00:02:16] I'm going to go with one of the ones I used to use in the UK, which would be easyJet.

Simon Harvey: [00:02:20] No about guess it, but it's actually Ryanair who tops the list. [00:02:24][3.5]

Sascha: [00:02:24] Oh, that was the next one on the tip of my tongue. [00:02:26][2.0]

Simon Harvey: [00:02:27] So Ryanair is top and this is actually reflected from Europe has probably been the worst hit. So let's start there. [00:02:33][5.5]

Audio clip: [00:02:33] Travel chaos across Europe. Thousands of flights cancelled. Mountains of lost luggage and soaring prices. [00:02:39][6.4]

Simon Harvey: [00:02:40] Airlines are advising passengers to arrive 5 hours before their flights to get through security. [00:02:44][3.9]

Audio clip: [00:02:45] London's Heathrow Airport has decided to cap the number of departing passengers to 100,000 today to try to minimise. [00:02:51][6.2]

Simon Harvey: [00:02:51] Delays in Amsterdam. Schiphol Airport, which is Europe's third largest airport, has been cancelling hundreds of flights and have actually seen half of its flights in July delayed and like Heathrow left cap the outgoing passenger numbers. And today, as are recording, Lufthansa in Germany is actually grounding all their flights. [00:03:09][18.1]

Sascha: [00:03:10] All their flights. That's that's really dire if you can't even get one plane off the ground. [00:03:15][4.5]

Audio clip: [00:03:15] Airport workers are also striking in the German cities of Hamburg and Frankfurt, the German government is fast tracking visas for workers from Turkey to bridge the gap. [00:03:24][8.5]

Simon Harvey: [00:03:24] And we are seeing strike after strike in Germany. As I mentioned, Lufthansa. This is caused by a ground staff strike across Europe and IFIs and Scandinavian airline pilots in Paris, workers at Charles de Gaulle and in Spain, Ryanair cabin crew. [00:03:40][15.9]

Sascha: [00:03:40] Well, that paints a fairly dire picture of what's happening in Europe. So let's now travel across the Atlantic to America. Air travel chaos is also disrupting their plans as well. What's going on in the U.S.? [00:03:53][12.9]

Simon Harvey: [00:03:54] All right, Sascha, let's play the game again. Which airline do you think has been hit the worst in North America for delays? [00:04:00][6.0]

Sascha: [00:04:00] Well, look, Simon, this is just testing my airline knowledge. So I'm going to go with Delta Airlines. They're the only ones I really know. [00:04:06][6.0]

Simon Harvey: [00:04:07] It's actually Air Canada. [00:04:08][1.0]

Speaker 5: [00:04:09] Airlines from Canada were the most delayed of the entire world. We had heard from officials that these delays have been felt everywhere in the world. But now we know it's the worst year like. [00:04:18][9.7]

Simon Harvey: [00:04:18] We've seen in Europe. North America has also been bad. The Bureau of Transportation Statistics say almost 95,000 flights were cancelled for May and bags go missing. According to The Guardian, six bags of every 1000 are actually being lost by US airlines. [00:04:35][16.9]

Audio clip: [00:04:36] Well, I think any time you sell a ticket and collect revenue in exchange for a promise to get somebody from point A to point B, you need to be prepared to actually do that. [00:04:44][8.5]

Simon Harvey: [00:04:45] But my favourite story, Sascha, US Transportation Secretary Pete Brundage Edge met virtually with airline executives to discuss the problem of flight cancellations. And then guess what? Days later, his flight from Washington, D.C. to New York was actually cancelled. [00:04:58][13.7]

Audio clip: [00:04:59] It's very important that the airlines and that the system are prepared to get them where they need to be. [00:05:04][4.5]

Sascha: [00:05:05] Let's not pause in the U.S.. Let's keep going with our round the world ticket. So from America, we're going across the Pacific into Asia. Hopefully we're not delayed. Can you tell me what's going on there? [00:05:15][10.7]

Simon Harvey: [00:05:16] All right, Sascha, last chance of the game, Asia. Which airline do you think's had the most delays? [00:05:20][4.6]

Sascha: [00:05:22] Oh, gosh. Again, lack of airline knowledge here. I'm going to go with Cathay Pacific. How they've been doing. [00:05:27][5.4]

Simon Harvey: [00:05:27] Not a bad guess. It's actually an airline called Vietjet and they've had a quarter of their flights delayed in Asia. [00:05:34][6.5]

Sascha: [00:05:34] Hours long security lines, flights delayed and cancelled. We were stranded two young children. [00:05:40][5.1]

Simon Harvey: [00:05:41] Asia hasn't seen the same influx of tourists as Europe, but they're still seeing a lot of issues. More than 5% of flights to and from Manilla in the Philippines are delayed more than a quarter to and from Hanoi and Vietnam. And the Chinese airlines are struggling. 13% of China, Southern Airlines and 10% of Beijing Airline flights have been delayed. [00:05:59][18.6]

Sascha: [00:06:00] Okay. So it doesn't sound quite as bad as Europe or even America, but still obviously affected. So finally, let's close it out a little bit closer to home, something that's probably affecting you and I a bit more. What's going on in Australia? [00:06:13][13.0]

Audio clip: [00:06:14] Travellers are being warned to brace for long queues and delays at airports around the country this morning. [00:06:18][4.7]

Simon Harvey: [00:06:19] And I find it hard to believe, Sascha. But according to the Guardian, Australia's leading airline, Qantas is reported losing one in ten bags. Sydney Airport. [00:06:26][7.8]

Sascha: [00:06:27] Is there anything worse than when you're travelling, then having your luggage lost? I mean, that's got to be one of the worst things to interrupt a holiday. [00:06:34][7.0]

Simon Harvey: [00:06:35] Absolutely. Qantas outsourced their baggage handling to Swissport and they reported that out of the roughly 100 burrows or luggage trolleys, if you like, that they manage in a day. These days, there are about ten bureaus each day that just don't make it on the plane. And Sascha, to save you, ask him about the rest of the world. Trust me, the problem is everywhere. I'll give you a few stats here. Africa, Egypt Air delaying 20% of flights. South America Aeromexico 20%. The flights delayed in the Middle East. Flydubai Turkish Airlines delayed more than 40%. And Jazeera Airways, they've delayed almost 50% of their flights in the Middle East. Air travel chaos is a global phenomenon. [00:07:14][39.5]

Sascha: [00:07:15] You know, you're really making me rethink any holiday plans that I had for the rest of the year. That's a pretty comprehensive look at air travel issues, and it's clearly not isolated to one country or one company. As you said, it's a global challenge. So let's take a quick break and then I want to ask you the big question that so far we've avoided answering, which is who's to blame? Is it the airlines? Is it the airports? And crucially, when can we expect these issues to be sorted? We are still hearing, though, of many flight delays and cancellations. [00:07:50][34.7]

Audio clip: [00:07:51] Travellers have been forced to wait in the cold and massive lines snaking out. [00:07:54][3.4]

Simon Harvey: [00:07:54] Just when you thought the problems at the airport couldn't get any worse. [00:07:57][2.5]

Sascha: [00:07:58] Welcome back to The Dive. Today, I'm joined by my colleague Simon Harvey and we are taking a look at air travel chaos enveloping the globe. And Simon, I really want to answer the big question, which is who's at fault? Is it the airlines or is it the airports? [00:08:13][15.4]

Simon Harvey: [00:08:14] I'm sure you won't be surprised to learn that the airlines blame the airports and the airports blame the airlines. [00:08:19][5.2]

Sascha: [00:08:20] That's not surprising at all. [00:08:21][1.0]

Simon Harvey: [00:08:21] So let me give you each side. [00:08:22][1.0]

Sascha: [00:08:23] Okay. Well, let's start with the airlines case. Why the airports to blame, then? [00:08:26][3.3]

Simon Harvey: [00:08:26] Airline executives are claiming the airports have been utterly unprepared for the influx of passengers. [00:08:31][4.9]

Audio clip: [00:08:32] It's not as though people turn up unannounced to get on a plane. They do book these seats many months in advance. Why is it that the airlines have not been making sure they have sufficient members of staff? [00:08:44][11.5]

Simon Harvey: [00:08:44] Ryanair, always good for a quote. The chief financial officer there, Neil Sorin, said the airports and I quote, had one job to do and they needed to be held accountable for and I quote, not staffing up properly on Thursday and said the industry faced Armageddon and pointed the finger at incompetent London Heathrow. And across the Atlantic, the chief operating officer of United Airlines suggested in internal memo that most of the delays and cancellations were, in fact, due to labour shortages in air traffic control systems at airports. [00:09:16][32.2]

Sascha: [00:09:17] So the airlines are blaming the airports for not staffing up properly. Now, give me the airport side. Why the airlines to blame? [00:09:23][6.0]

Simon Harvey: [00:09:24] Basically, the airports are saying the airlines oversold the flights. They took more bookings than they could manage. And this has caused the cancellations and chaos, then struggle to staff the flights have sold, forced them to cancel and leaving passengers stranded. And then what happens when you get stranded? Passengers at airports, it has a knock on impact to the whole system and the airport breaks down. [00:09:43][18.8]

Sascha: [00:09:43] That sounds like a pretty reasonable argument. [00:09:45][1.4]

Simon Harvey: [00:09:45] Yeah. London Heathrow blamed the chaos and a lack of ground staff employed by the airlines to check in passengers and organised luggage and suggested the airlines, well, I quote, improper add of safe and reliable passenger journeys. Let's put some numbers to it. In the first six months of 2022, British Airways cancelled 3.5% of their flights, and easyJet cancelled 2.8% of their flights. And in the US, since the start of June, 26,000 flights have been cancelled and 260,000 or 22% have been delayed. According to FlightAware, a flight tracking company. [00:10:19][33.9]

Audio clip: [00:10:20] We have to ask our airlines why they didn't forward plan in America. [00:10:24][4.4]

Simon Harvey: [00:10:25] Airline executives acknowledge overcommitted and have since reduced capacity by 16%, but it feels a bit too late. [00:10:32][6.8]

Sascha: [00:10:33] SIMON There is a two convincing arguments, but I'm sure, as with most things in life, the truth lies somewhere in between. What's the case here? [00:10:42][9.2]

Simon Harvey: [00:10:42] Yes, I think that's right, Sascha. And as the air travel chaos gets worse, we're seeing some weaker and weaker excuses from airline executives. We saw the CEO of Australia's biggest airline, Qantas, blame passengers for forgetting how to take their laptops out of their bags when going through airport security. And he said they weren't match fit for travel. And my favourite Sascha, the boss of Frankfurt Airport in Germany, he's blamed the chaos at airports on too many travellers having the same black suitcases.

Sascha: [00:11:08] Well, I'm confident that black suitcases didn't cause all of these cancellations, though that seems a bit farfetched. So what is to blame here?

Audio clip: [00:11:17] One bit of context is the airlines receive billions of dollars during COVID and aid during COVID. Do they owe consumers more than what they're giving them now and have they held up their end of the bargain? 

Simon Harvey: [00:11:29] The travel industry, both airlines and airports, stood down a majority of their staff for two years, and they have struggled to start back up. When COVID hit in 2020, the airlines and airports were given big support packages from governments and to preserve cash flow, they actually offered many early retirement packages and the oldest and most experienced staff took them. Fast forward two years and overall staffing levels in the industry are actually close to their pre-COVID levels. It's just that now we've got a large number of inexperienced and recent highs and have been unprepared to manage this summer travel season. Add to that the ongoing COVID outbreaks amongst staff and travellers, extreme weather and a surge in demand to what was forecast. 

Sascha: [00:12:10] So the conclusion, unsurprisingly, is that an unprecedented global pandemic is to blame. 

Simon Harvey: [00:12:16] Yeah, I think you're right there, Sascha, and I wish you the best of luck travelling next week. Hopefully you make it through and don't lose your bags.

Sascha: [00:12:23] Look, if I turn up to the office on Monday, then we know that it's been a success. I've managed to get on a plane that's lifted me up into the air and got to Sydney. Thanks so much for joining us for today's edition of The Dive. Remember to follow us on Instagram at the Dive DOT. Business News is our handle and if you've enjoyed this podcast, tell a friend about it. Word of mouth is the best way for a podcast to go. A reminder. If you're in the UK we're testing refer a medick. Head to the link in the show notes to learn more. You can find yourself on a hopefully not delayed plane to Australia. Thank you so much for joining me today on the show, Simon. It was wonderful to have you. [00:12:58][35.9]

Simon Harvey: [00:12:59] Thanks for having me, Sascha.