Air Fares and Staff Gaps Cast a Shadow on Transatlantic Travel Rebound

Airlines expect the end of North American Covid-19 testing requirements to fuel a rebound in transatlantic travel. However, soaring fares due to staffing shortages may slam the brakes on rising demand in the most significant international travel market. The U.S.’s requirement that air travelers arriving from other countries test negative for Covid has been blamed by air carriers for reducing demand for air travel.

However, airlines report surging interest in international travel after the White House scrapped the rule. U.S. airlines just enjoyed one of the strongest quarters in years due to booming demand for travel. All major carriers have issued optimistic forecasts for their revenue outlook despite trimming capacity.

Amidst soaring inflation, fares are up while jet fuel costs are soaring, but so far, there is little evidence of the soaring costs hurting travel spending after more than two years of Covid-19 regulations. However, there are some warning signs. A May survey of American travelers found a slight drop in interest due to rising fares and growing economic concerns.

Airport and airline executives have spent the past two years trying to convince passengers that it was safe to fly during a pandemic by touting aircraft’s hospital-grade filters and reduced touch points.

Air travel soars back; labor struggles to catch up

As Covid restrictions fall away and countries rapidly reopen borders, travel has voraciously sprung back, which has resulted in a significant labor crunch. Pandemic-induced layoffs of thousands of workers, from ground-handling staff to pilots to cabin crew, have forced the already-overwhelmed airlines to cancel a growing number of flights.

Some former employees have chosen not to return, having lost their jobs due to the pandemic. Many aviation-sector employees have moved on to less volatile careers, and convincing them to return is proving difficult.

How airports and airlines manage the challenging work climate varies from region to region. Ryanair Holdings Plc’s Spanish cabin crew union recently announced that there would be six days of a strike soon after salary-increase talks fell apart. According to union officials, workers are preparing to walk out.

In Asia, airports have taken proactive steps, including asking airlines to reschedule flights or denying airlines permission to add new flights. Disruptions have also been substantial, particularly in European hubs like Frankfurt, Paris, Amsterdam, and the U.K.

Recently, a disabled person died in the U.K. at Gatwick Airport as he took an escalator. According to media reports, he had waited for airline staff to bring him a wheelchair. Reports said the incident was caused by staff shortages, although Gatwick airport denied the allegation.

A lingering concern of airports and airlines is that the high demand may not last. Airlines could then face an overcapacity problem in staffing and fleet if they hire aggressively and bring their idle jets back into service. Inflation is driving up living costs, and with airfares already considerably higher than most travelers’ comfort levels, there is a possibility that people may vacation locally or stay at home once the initial excitement subsides.