According to the CEO of United Airlines, other airlines won’t be able to handle all the flights they intend to fly this year, which will cause further travel disruptions.
Airlines that operate as if this is still 2019, before the pandemic, will struggle, according to Scott Kirby.
In addition to antiquated equipment and a lack of pilots and other staff, he claimed that the business is also under pressure from the Federal Aviation Administration, which oversees the nation’s airspace.
According to Kirby, the current volume, let alone the predicted rise, is simply too much for the system to handle. “A lot of airlines are unable to fly according to their schedules.
Customers are footing the bill.
Kirby highlighted the significant cancellations in late December to illustrate what may go wrong.
After a winter storm disrupted the schedule and overloaded the airline’s staff scheduling system in late December, Southwest Airlines — which Kirby did not specifically name — canceled or postponed close to 17,000 flights.
He said, “What happened during the holidays wasn’t a one-time weather-related incident, and it wasn’t just at one airline.” In late December, there were double-digit percentages of canceled flights on Alaska, Spirit, and Frontier.
Kirby made the comments during a conference call with analysts and journalists to discuss his company’s fourth-quarter financial results.
He spoke in an oppositional fashion.
The majority of airline executives seldom ever criticize their rivals in public. And they frequently have unwavering optimism.
Unsurprisingly, Kirby claimed that United is employing a different strategy.
He claimed it had made technology investments, has more staff per trip than before the pandemic, maintains more spare planes, and doesn’t overbook itself.
However, those actions have increased United’s cost to fly a mile, excluding fuel, by nearly 15% over what it was in 2019.
Last year, United’s cancellation rate was marginally better than most competitors, but it wasn’t the greatest.
According to FlightAware’s tracking website, among the six biggest U.S. airlines, Delta cut 1.4% of its scheduled flights in 2022, while United cut 2.0%, Alaska cut 2.4%, American cut 2.5%, Southwest cut 3.0%, and JetBlue cut 3.1%.
Last week, one more challenge confronted each of those airlines. Over 1,300 American planes were canceled, while 11,000 were delayed.
Kirby defended the FAA but asserted that Congress doesn’t provide the organization with enough funding to keep up with its expanding workload, which now includes monitoring drone and rocket launches and stepping up its scrutiny of operators in the wake of two Boeing 737 Max tragedies in 2018 and 2019.
Kirby joined CEOs of Delta Air Lines and American Airlines in this assertion.
Chicago-based United, which announced a profit of $843 million for the fourth quarter after the market closed on Tuesday, forecasted that 2023 earnings would handily above Wall Street estimates. Nevertheless, United Airlines Holdings Group Inc.’s shares plummeted 4.6% on Wednesday, while most of its competitors experienced lesser declines, and Delta managed to post a marginal gain.