Dec. 30 (Bloomberg) -- The U.S. aviation system’s struggles to recover from snowstorms that closed New York’s airports this week reflect the unintended consequences of airlines’ efforts to squeeze out costs.
Flights are so full and scheduled so tightly that there is no room for quick recovery when airports are closed, industry analysts said. Stranded passengers’ complaints about confusion and lack of communication may prompt reviews by air carriers and regulators about what happened and how to best respond the next time poor weather coincides with a busy travel period.
“When your planes are all 90 percent full and you cancel a flight, it’s going to take you another 10 flights to re-accommodate all those passengers,” said Darryl Jenkins, a Virginia-based aviation industry consultant. “We won’t be able to re-accommodate everybody.”
Airlines have reduced seating capacity by 9.1 percent and full-time equivalent employment by 14 percent in the past five years, according to the U.S. Bureau of Transportation Statistics. The capacity reduction and increased passenger demand, as the economy improved, have created the airline industry’s highest load factors since World War II.
That means that available seats are scarce for the as many as 1.2 million passengers who may have been affected by about 8,200 cancellations due to the snowstorm, and there are fewer employees at airports and reservation centers to assist those passengers.
Calls for Help
United Continental Holdings Inc.’s Continental Airlines, which fired 600 of its 2,600 reservation agents in February because more passengers were booking on the Internet, said yesterday that call volume was 2 1/2 times normal this week as passengers sought assistance in rebooking flights.
The airline, which has a hub at Newark Liberty airport, has brought in more than 300 additional customer service agents, increased overtime pay and deployed 45 volunteers from Houston to Newark to help rebook passengers, said Christen David, a Continental spokeswoman.
Tim Omaggio, a Morristown, New Jersey, father whose daughter was scheduled to fly from Newark to Phoenix on Dec. 28, filed a complaint with Continental after being unable to get help from airline employees at the airport or on the phone.
“That should have been all hands on deck, without a doubt,” Omaggio said in an interview yesterday. “I’ve been in a lot of these delays while traveling on business. If you’re communicated to and told what’s going on like an adult, people are a lot more understanding. But when you’re told nothing, or sent to something that turns out to be a dead end, it makes it that much worse. It was just a lot of poor communication.”
At least 332 flights were canceled yesterday, three days after the worst December snowstorm to hit New York City in six decades. The disruptions affected the nation’s largest and most congested air travel market during one of the busiest times of the year. Thousands of flights were canceled each day during the three-day storm and aftermath, spokesmen for U.S. airlines have said.’
Delta Air Lines Inc. and JetBlue Airways Corp., which has a hub at New York’s John F. Kennedy International Airport, are among the airlines that said today they have rebooked most of the passengers stranded by the storm.
“The big issue right now is people traveling to destinations where we only fly a couple times a day and there’s only a finite number of seats to that city,” Anthony Black, a spokesman for Atlanta-based Delta, said. “Those people might take a little longer.”
JetBlue canceled 120 flights yesterday and said its backlog of stranded passengers may not be fully cleared until Jan. 1.
Continental also canceled 120 flights yesterday, primarily those operated by regional partners at Newark Liberty, David said.
Because the initial cause of this week’s flight delays and cancellations was weather, customers will be more forgiving than with delays for other reasons, said Dean Headley, co-author of the annual Airline Quality Rating and an associate professor of marketing at Wichita State University in Kansas.
“With the load factors being what they are, the capacity reductions and everything, people have to understand that’s a good possibility even with good weather that flights get canceled,” Headley said in an interview yesterday. “If you miss a flight, you can’t just hop on the next airplane.”
David Swierenga, president of aviation consultant AeroEcon in Round Rock, Texas, said demand for low fares has forced airlines to cut costs by, among other things, leaving fewer empty seats.
“We deregulated the industry to improve the efficiency of the industry and the airlines responded to that in spades,” Swierenga said in an interview yesterday.
Return to Profitability
The eight biggest U.S. carriers as a group in July reported their first quarterly profit after 10 straight losses stretching back to the final three months of 2007. During the three-year period, the airlines faced surging fuel prices, a slump in business travel during the recession and the outbreak of the H1N1 virus that prompted the suspension of some international flights.
Airlines’ hands are tied, said Hunter Keay, a Baltimore-based airline analyst with Stifel Nicolaus & Co.
“There’s really not much the airlines can do at this point,” Keay said yesterday in an interview on Bloomberg Television. “They are sort of beholden to the weather. The airports are obviously working as hard as they can to clear the storms.”
The airline industry and regulators must evaluate what happened this week and make sure airlines, airports and government agencies have coordinated contingency plans, said Steve Lott, a spokesman for the Montreal-based International Air Transport Association.
“We have to find out exactly what happened first,” Lott said in an interview. “It will take time. There are many parties involved, but primarily it’s the airlines, the airport and the government. There’s a lot of finger pointing that goes on, unfortunately.”
The U.S. Transportation Department is looking into details of the New York flight delays and will review other cases, Olivia Alair, an agency spokeswoman, said in an interview. Transportation Secretary Ray LaHood has been updated on the situation.
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