Delays, shortages and strikes: how is the aviation industry coping?
It’s fair to say the travel industry hasn’t had the easiest year so far, and with the summer holiday season – which is now well underway – comes a fresh lot of setbacks for a sector already under immense pressure.
Recent data from the Civil Aviation Authority (CAA) shows that one in five (19.5%) flights leaving UK airports took off later than planned in the last financial year, with the average delay standing still for 11 minutes. But what’s causing so many airports to delay their flights? And what impact has this had upon the industry?
At the heart of the issue is severe staff shortages. Following huge reductions in flight departures during the COVID-19 pandemic, airlines were operating with limited cabin crew as a large proportion of staff were either furloughed, made redundant or left to find more stable employment. Airports, too, reduced the number of workers and cleaners on the floor in line with the reduced number of flights. But despite increasing demand, both airlines and airports have been struggling to hire ever since and have yet to recover to pre-pandemic workforce numbers.
As restrictions have eased across Europe, 2022 will see many jetting off on their first holiday abroad in almost three years, with business travel also on the increase as companies seek to move back to in-person meetings after years of virtual working. This sudden increase in demand, combined with the staff shortages, has resulted in passengers queuing for hours to go through security or to collect their luggage, and last-minute flight cancellations. This inevitably has impacted customer relations and overall consumer satisfaction. With increased travel time and additional expenses on food and accommodation becoming far more frequent, there has been a substantial rise in customers having to pay out unforeseen costs.
With airport and airline staff under huge amounts of pressure, it’s unsurprising that strikes have become somewhat routine. EasyJet, British Airways and Ryanair all have strikes scheduled across Europe during Summer 2022, pushing many airlines to increase pay to encourage their employees to return to work. In the latest anticipated strike at Heathrow Airport, British Airways granted workers an 8% pay rise to avoid further disruption at the UK’s busiest airport. And with rising fuel and maintenance costs, as well as compensation pay-outs for delayed and cancelled flights, airlines are seeing a direct impact on overall revenue.
It’s had a serious knock-on effect on the economy as a whole. As airline costs increase, carriers are inclined to charge passengers a higher fare, not only affecting holiday goers but also those industries such as tourism, which rely on air travel. And although it may seem like these price increases won’t directly impact many, they feed into the overall rise in inflation and, over time, will play a role in squeezing consumer spend.
But it’s not all bad news. Despite the delays, demand for travel remains strong and airlines are putting processes in place to help mitigate further disruptions. As customers and businesses become more accustomed to the potential disruptions, they too are being strategic in their arrangements.
For those businesses looking at how to best navigate the journey ahead, it would be wise to invest in full-proof travel and credit insurance. This is particularly important for trading overseas to ensure cover against non-payment in the event of delayed departures and the late arrival of goods. Credit insurance also allows businesses to vet who they will be trading in; a benefit that has proven invaluable for those looking to expand to new markets.
The hope is that by 2023 the situation will have calmed down and staff retention will have increased, but for now, and as the rate of inflation stands, customers and businesses looking to travel and trade globally must continue to step carefully.
Nicola Harris, Senior Underwriter at Atradius UK & Ireland