Surges in air fares, delays, cancellations, strikes and general airport mayhem have dominated the headlines so far this summer, and with massive staff shortages throughout the global aviation industry, there is no prospect of the situation easing any time soon.
Experts say the malaise has so far hit Europe the hardest, and within that the post-Brexit UK has suffered the most as operators here lack recourse to remedies available to their counterparts on the mainland. Add to that the that fact holidaymakers elsewhere have the option – increasingly expensive though it may be – to travel by car or train to sunnier destinations, an alternative largely unavailable on the British Isles.
According to flight tracking company RadarBox.com, Europe had more than double the cancellations of US carriers between April and June, and almost triple the number in the same period 2019. Amsterdam’s Schiphol led the way with 14,200 cancellations, but taken together London’s Heathrow and Gatwick topped that with 8,200 and 6,800 cancellations respectively.
Giving evidence last week before the UK Trade and Business Commission, a cross-party group set up in 2021 by MPs and business leaders opposed to Brexit, senior industry leaders emphasised that these problems were not caused by Brexit, but rather by a lack of industry support that forced the loss of thousands of jobs.
Nigel Milton, chief of staff at Heathrow, noted that furlough support ended at the close of September 2021 yet international travel restrictions were not lifted until almost six months later on March 18. During that period, the UK industry “lost a lot of people” who until then were at the ready for a return to normal service.
“The UK industry received a lot less sectoral support than some European governments gave,” Mr Milton said. “The Government says it made £8 billion available, but that was for the aerospace industry, not aviation.
“We had to cut further.”
According to Investopedia, ticket prices have dropped by about 40% since 1978 as deregulation, the evolution of low-cost carriers, and consumer purchasing power via the internet combined to the advantage of travellers. This in turn has driven a dramatic increase in passenger numbers as what was previously the domain of the financially elite came into the reach of the mass market.
However, those travellers are now increasingly losing confidence in whether the aviation industry can deliver as promised and on time. Sitting last week (via Zoom) before the Trade and Business Commission, UK leaders suggested that consumers may in future pay a premium to ensure reliable service, whether they like it or not.
The problem is not just Brexit, nor even Covid. Digging beneath the surface of these more current developments John Geddes, head of corporate affairs at Edinburgh-based Menzies Aviation, described deep-rooted problems that have been running throughout the supply chain for many years.
The fundamental issue, he said, is pricing. As an employee of one the world’s largest suppliers of airport services – including ticketing, baggage handling, cleaning, and refuelling more than a million flights annually – Mr Geddes clearly has a vested interest in talking up the need for better contract rates, but he makes a compelling argument nonetheless.
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Except for BA’s Terminal 5 at Heathrow, pretty much everything that happens at any airport in the UK is managed by outsourced workers. The folk at the ticket desk in Edinburgh may be wearing a BA uniform, but they are employed by Menzies.
Some of these “land side” jobs were previously held by EU workers, many of whom went home during the pandemic and have not returned, deterred by the UK’s lengthy and onerous visa application system. Though not the primary cause of current problems, Brexit has exacerbated the situation.
Where this really comes into play is on the “air side” where EU workers previously made up about 30% of all baggage handlers employed by Menzies in UK airports. Replenishing depleted staffing ranks has been a slog as this physically demanding work includes unsociable hours as standard, with pay rates that increasingly fail to compensate for the hardship.
Operating on a profit margin of about 5%, Mr Geddes said Menzies has little room for manoeuvre. Mr Milton at Heathrow agreed with this assessment.
“The contracts airlines have with other companies to do things like clean the aircraft, catering the aircraft, putting the baggage on and off – those are definitely contracts that have been on a race to the bottom,” he said. “They are incredibly competitive and it is often based on cost rather than service.
“We need to look at paying every person in the aviation chain a decent wage, and the consequence of that is the cost to consumers may have to go up, and I think that is a reality that the industry needs to face up to.”
Flight delays caused by problems on the ground can lead to regulatory fines for the airlines, Mr Geddes said, while the damage to aircraft from mishandling heavy equipment is potentially costly. So too is the reputational injury from customer baggage that is lost or damaged.
Yet in what has become UK plc’s depressingly common preference for management through cost-based accounting – rather than investing to grow the top line – Mr Geddes said getting buy-in on this has been the devil’s own job.
“At the end of the day we are victims of the stock market,” he said. “Chief executives are under huge pressure to deliver profits, and it is very difficult to tell somebody to take a leap of faith [that paying higher contract rates] will increase their profits when they can see a spreadsheet that says they cut their costs by X percent.”
The remainder of this year will be an onerous one for air travel, and much work has yet to be done to ensure there is no repeat in 2023 of the scenes witnessed this summer.
What emerges at the other end is still a tough call. Public appetite for international travel has clearly not abated to any considerable extent, but the cost of getting there may be pricier over the long haul.
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