American Airlines canceled nearly 600 flights over the weekend through Monday, and is cutting about 1% of its flights in July. That could be just the beginning of a rocky summer for travelers and a robust one for airlines. Delays, cancellations and higher fares could be the norm.
One word of advice for voyagers: "patience," said Helane Becker, longtime airline analyst. She laid out to Yahoo Finance Live the reasons behind the delays, and why they could very well continue.
First up is a central reason cited by American Airlines: worker shortages. Some are a factor of the COVID-19 pandemic, and some are due to typical airline operating procedures. American and other airlines like Delta Air Lines have announced they're ramping up hiring, but it will take time.
"Because of the pandemic, a lot of pilots that may not have retired until 2021 or 2022 or '23 accelerated their retirement to last year," said Becker, a senior analyst at Cowen & Co. For pilots who were temporarily sidelined when airline demand plunged, "it takes about a year to bring a pilot up from a furlough and get him or her ready to fly again."
For pilots who are working, "there's what I call the 16-13-10-hour rule, that basically says pilots can work 16 hours during the day, 13 hours overnight and need 10 hours of rest between shifts." That means the lower number of pilots can, for safety reasons, only work so much.
Secondly, not only are there fewer pilots, there are also fewer planes.
"Last year, you may remember, airlines accelerated retirement of a lot of aircraft," Becker said. One example was American, which permanently grounded 156 of its planes in 2020; Delta also said an early farewell to some of its Boeing jets as a result of the pandemic.
Finally, there's a perennial summer problem that's only intensified as a result of climate change: weather-related delays and cancellations.
"Pop-up thunderstorms wreak havoc with the industry, and you don't know when they're coming," said Becker.
Not only has the amount of precipitation increased in recent years — that rain increasingly comes in what the Environmental Protection Agency calls "extreme one-day precipitation events." Tropical storm intensity has also risen.
The reason all of these issues are particularly problematic for travelers is that they've come amidst a surge in demand. This week, passengers traveling through Transportation Security Administration (TSA) checkpoints surpassed 2 million in a single day for the first time since March 2020. Monday's passenger traffic of 2.03 million compares with 2.72 million on June 21, 2019, according to the TSA.
That could mean a strong summer for airlines, said Becker and other analysts. That optimism, though, is not necessarily reflected in recent stock action. While American (AAL), for example, is up some 40% this year, the shares are down nearly 3% from a 52-week high in early June. Delta (DAL) has risen about 12% year-to-date, but is down 10% since a high in early April. United Airlines (UAL) and Southwest Airlines (LUV) have also sold off from highs earlier this year.