star

Airlines temper flying ambitions after chaotic — but profitable — travel rebound

The leaders of the country’s biggest airlines learned a hard lesson this summer: it’s easier to make plans than to keep them. The three biggest US carriers — Delta, United and American — are dialing back their flight growth ambitions, an effort to fly more reliably after biting off more than they could chew this year as they chased an unprecedented rebound in travel, despite a host of logistical and supply chain constraints as well as staffing shortages. The cuts come as airlines face elevated costs that they don’t see easing significantly just yet, along with the possibility of an economic slowdown and questions over spending by some of the country’s biggest corporate travelers. United Airlines estimated it would restore 89% of 2019 capacity levels in Q3, and about 90% in Q4. In 2023, it will grow its schedule to no more than 8% above 2019′s, down from an earlier forecast that it would fly 20% more than it did in 2019, before the Covid-19 pandemic hamstrung travel. “We’re essentially going to keep flying the same amount that we are today, which is less than we intended to, but not grow the airline until we can see evidence the whole system can support it,” United CEO Scott Kirby said after reporting results Wednesday. “We’re just building more buffer into the system so that we have more opportunity to accommodate those customers.” American Airlines CEO Robert Isom also spoke of a “buffer” after reporting record revenue on Thursday. That carrier has been more aggressive than Delta and United in restoring capacity but said it would fly 90%-92% of its 2019 capacity in Q3. Delta, for its part, apologized to customers for a spate of flight cancellations and disruptions and said last week said it would limit growth this year. It earlier announced it would trim its summer schedule. On Wednesday, Delta deposited 10,000 miles into the accounts of SkyMiles members who had flights canceled or delayed more than three hours between May 1 through the first week of July.<br/>

United Air CEO offers apology to Buttigieg after FAA criticism

The head of United Airlines Holdings apologized to US Transportation Secretary Pete Buttigieg after the carrier publicly faulted regulators for worsening flight delays. Scott Kirby, United’s CEO, said he reached out to clarify comments in a staff memo earlier this month. In it, a United executive said half of its delay minutes and the majority of cancellations over the prior four months were the result of actions by the Federal Aviation Administration to manage traffic and flight capacity. That prompted a sharply worded rebuttal from the agency, which accused United of deceptively conflating traffic-control actions with steps taken in response to poor weather. Kirby didn’t back down from the broader claim that flight disruptions have been largely out of the airline’s control, but said the specifics of United’s argument were misconstrued. “I apologized to Buttigieg because that is not what we intended,” the CEO said Thursday on a conference call to discuss quarterly earnings. United said July 15 that COO Jonathan Roitman, the executive who wrote the earlier memo, would move to an advisory role and be replaced by Torbjorn Enqvist. The airline didn’t give a reason for the change. The share of US flight delays caused by airlines, as opposed to weather or air traffic control, surged to about 58% -- the highest level on record -- this year through April. The number surpassed those that were late because of storms, the government’s air-traffic system and security glitches, based on the data that’s submitted by carriers to the US DoT. The numbers also showed there was some truth to airline claims that staffing issues at FAA air-traffic facilities had contributed to the problem.<br/>

SAS seeks time to gather Chapter 11 financial data after strike strains resources

SAS has sought additional time to gather and submit details of its financial affairs for US Chapter 11 proceedings, citing the stretching of its resources during the recent pilots’ strike. SAS and 13 affiliate and subsidiary companies filed for Chapter 11 protection on 5 July, the day after cockpit crew took industrial action. The strike lasted 15 days and SAS – which initially put the cost of the walk-out at SKr1.5b ($147m) – is still calculating the specific financial impact of the action, which resulted in 3,700 cancelled flights. Under US bankruptcy regulations SAS needed to file details of assets and liabilities, and statements of financial affairs, within 14 days – a deadline of 19 July. While SAS, assisted by professional advisors, has mobilised their employees to work “diligently and expeditiously” on preparing the statements, its resources have been “strained”, states a court filing. “Collecting the information needed to prepare the [documents] requires an enormous expenditure of time and effort on the part of [SAS and the affiliates],” it adds. “This expenditure of time and effort has been particularly difficult for [SAS] as a result of the pilots’ strike that concluded [on 19 July].” It says some 900 pilots were involved in the industrial action and that it “severely hampered” the carrier’s operations, requiring employees – including those needed to help gather financial information – to “focus efforts on addressing the fallout of the strike”. Although the strike has ended, the pressure on SAS has remained as a result of dealing with restoring flight schedules and re-arranging travel bookings for passengers affected by cancellations and delays. “These matters continue to require the [SAS’s] full attention during the already-busy summer travel season,” says the filing.<br/>