Airlines across American are continuing to have trouble keeping their schedules running in order. We’ve already seen countless airlines announcing having to cancel hundreds, if not thousands, of weekend flights for a variety of reasons. While bad weather is a frequent excuse, the main issue seems to be a staffing problem. That’s what happened with American Airlines (AAL) over the weekend, which announced it would be canceling over 1,900 different flights across the country.
According to American Airlines’ management team, surprise wind gusts continuing from last week ended up slowing the rate of arrival for planes in a number of airplane hubs. The end result was the cancellations continued to snowball as delays escalated, with flights and pilots struggling to play catch up with the situation.
“Our staffing begins to run tight, as crew members end up out of their regular flight sequences,” said American Airline’s COO, David Seymourt. “Airlines found they overcompensated in terms of the cut they made to their fleets, to their payroll counts. You can’t fly planes, if you don’t have people to unload the bags that are on them, or people to check you in, or people to help you board an airplane safely,” added Vik Krishnan, a McKinsey aviation consultant.
It’s the third time since August that American Airlines ended up having to cancel large numbers of flights. Before that, we’ve seen both Spirit Airlines (SAVE) and Southwest Airlines (LUV) cancel thousands of flights for seemingly similar reasons. Both companies reported they lost close to $100 million in revenue due to these flights, with American likely to suffer a similar loss due to this situation.
It’s a stark contrast to the situation last year when Airlines were laying off a large portion of their employees due to a lack of demand. Even the Trump administration got involved, offering airlines incentives if they didn’t fire their workers. Now the situation is reversed, with Airlines struggling to hire back all of their former employees that left.
Despite the news, shares of American Airlines didn’t move much in response, although that could change once Monday’s trading session comes around. In general, Wall Street is becoming increasingly bearish on how the entire aviation industry will fare going forward.
However, there is some speculation that these cancellations might have something to do with vaccine mandates and that some pilots are refusing to show up as an act of protest. Even if that’s not the case, unions are becoming increasingly at odds with airline companies, the latter of which is forcing workers to go above and beyond to prevent more cancellations. With no easy solution in sight, it seems these types of cancellations are going to become a common occurrence going forward.
American Airlines Company Profile
American Airlines is the world’s largest airline by scheduled revenue passenger miles. The firm’s major hubs are Charlotte, Chicago, Dallas/Fort Worth, Los Angeles, Miami, New York, Philadelphia, Phoenix, and Washington, D.C. After completing a major fleet renewal, the company has the youngest fleet of U.S. legacy carriers. – Warrior Trading News
