Airline traffic has recovered more slowly in Asia compared with other regions, but being the laggard could offer valuable insights on how to prepare for a sudden uptick in demand and avoid schedule disruptions that marked the operations of U.S. and European airlines during the holiday season and continued into the new year.
U.S. airlines canceled some 34,500 domestic and international flight departures between December 17 and January 15 due to bad weather and Covid-related staffing shortages, according to Airlines for America data. Outbreaks of the Omicron coronavirus variant and quarantine obligations among pilots, flight attendants, and other airline workers forced Lufthansa and SAS to cut several short and long-haul flights around Christmas and Finnair last month preemptively reduced its schedule for February by around 20 percent, citing a “significant” increase of sick leave among staff at the airline and its partners.
Airlines in the Asia-Pacific region can avoid similar schedule disruptions, according to Umang Gupta, managing director and global airline practice lead at Alton Aviation Consultancy. What happened in the U.S. and to a lesser extent in Europe could offer a valuable lesson for when demand roars back in Asia, he told AIN. “This hockey stick-like phenomena will, fingers crossed, happen in Asia also,” he said, advising that airlines in the region need to get ready for a sharp increase in demand after a flat and quiet period. “It is not easy to get staff, especially operational staff such as pilots and cabin crew back online as fast as you would want,” noted Gupta.
When leisure demand in the U.S. came back stronger and faster than airlines had anticipated, they wanted to fly as many airplanes as possible, understandably so. But staffing levels hadn’t yet returned to pre-Covid levels, he said. As of November 2021, U.S. passenger and cargo airlines employed almost 46,000 fewer workers than they did pre-pandemic in spite of the industry receiving $63 billion in federal stimulus money under the Payroll Support Program and other incentives.
Meanwhile, staff fell ill with Omicron and there remains a shortage in the overall U.S. labor market. Many employees did exit the industry and have accepted job opportunities in other sectors. “This is really the crux of what is happening in the U.S.,” Gupta said.
To prevent a shortage of workers straining operations or hindering the upscaling of capacity when borders finally open in Asia and Covid subsides, management should consider paying a premium to retain or rehire furloughed staff and ensure currency of pilot training and licenses, asserted Gupta. Owing to airlines’ high growth pre-Covid, Asia complemented its locally trained pilots with pilots from Europe and North America. But many of the foreign crews have left the region and left the business, noted Joshua Ng, Alton’s director in Singapore. Moreover, some U.S. airlines have begun actively recruiting pilots from the Asia-Pacific region. David Neeleman's newest venture, Breeze Airways, is advertising positions on its website for “seriously nice” Australian Airbus A220 and Embraer E190/195 pilots.
“Laying off these foreign pilots was an easy way for airlines to save costs,” Ng explained, adding that it also resulted in occasional hiccups as remaining pilots operated aircraft types that they weren't used to during the first Covid recovery wave early last year. As widebodies remain grounded while waiting for international traffic to rebound, Ng observed that more airlines have started re-training widebody pilots to fly narrowbody fleet types.
The head of Alton’s Singapore office recommends building a pool of “spare pilots” to cover for pilots who fall ill with the virus or have entered quarantine, yet he acknowledges that due to highly the contagious nature of the Omicron variant, even a large reserve of pilots might not compensate for the extremely high sickness rate. It also will add costs, which airlines cannot afford at the moment.
Increasing pilot efficiency presents another way to address flight crew strains, said Gupta. “Airlines can look at creating schedules that expand the number of block hours pilots fly and possibly link more flying hours to a bonus. This is a win-win for pilots and the airlines,” he said. “In the past, schedules were designed in a way to maximize revenue of the aircraft and a route. The pilot efficiency was not always considered.”
Gupta also cautions airline bosses in Asia not to make the same mistakes some of their American counterparts did and over-schedule when demand emerges. “Make sure to balance schedules and capacity with the number of staff available,” he said.
Upscaling Digitalization
Advancing digitalization and passenger self-service solutions could help support a smooth expansion of capacity or address disruptions without the need for additional staff. “Again, this is a win-win,” maintained Ng. Passengers prefer to self-check-in or rebook their flights via a dedicated link rather than wait for hours in a queue anyway, he said. “And airlines can better service their passengers without the need for staff,” Ng added.
Creating a more streamlined and digitally-enabled journey to boost passenger confidence and enhance convenience stands as a priority for airlines and airports, according to findings from SITA's 2021 Air Transport IT Insights, released in January. According to the report, airlines’ spending on automation of passenger processing has risen “significantly.” In the air, tackling digitalization in the cabin and in the flight deck remains a primary goal, with crew and mobile applications for pilot services all attracting a growing slice of IT spend. On the ground, airline investment has increased in areas such as self-service through the web, mobile, bag drops, boarding gates, and bag notifications. Touchless and low-touch technologies stay firmly in the investment mix, combined with investments in passenger identity management driven by biometrics. Airlines’ investment plans at the airports include self-service solutions to help them face irregular operations.
This year’s IT Insights also identifies passenger health certificate verification as an area for urgent attention. In 2021, staff across 81 percent of airlines resorted to performing manual verifications of health certificates in paper or scanned format. However, airlines want to automate the process over the next three years, with the majority investing in verification via a mobile app (51 percent) and nearly half investing in kiosk-enabled health checks (45 percent).
“The industry faces pressure from all sides with an urgent need to reduce costs by optimizing operational efficiency while also adhering to new operational hurdles connected to Covid-19,” said SITA CEO for airports and borders David Lavorel. “Smart technology, automation, and digitalization are the only ways our industry can thread the needle between profitability, safety, and sustainability,” he concluded.