+ ON THE SOAPBOX: Professor Chris Tarry - Principal at CTAIRA

This summer has brought to mind at least parts of one of the more famous quotes from Charles Dickens’s Tale of Two Cities where he wrote “It was the best of times; it was the worst of times”. Indeed, some of the sentiments expressed in the remaining part of the sentence are also quite apposite.

As regular readers will know generalisations are always dangerous and for the majority of those travelling there was little or no delay or impact from cancellation and everything associated with their journeys went well or reasonably well, it is always the exceptions that are of both interest if not concern. And last weekend was an exception!

We continue to hear a lot about “pent up demand” which should have been of no surprise to anybody given that the pandemic was quite different to previous “event related disturbances” that have impacted the industry, where this time it was the ability to travel that had been restricted.

What we have seen in the “recovery phase” is also a manifestation of how “economics works” for if there is, or you create, a situation where demand is greater than supply, prices will inevitably be higher and here the record profits that at least some airlines have been reporting are unsurprising. However, for the airline industry this will not be a “new norm” as capacity returns and demand and supply move back into balance and the lagged effect of inflation and slow economic growth come into play; indeed, fares in the domestic US market are already reported to be declining.

Against this background, it was not until April that Heathrow’s management became more realistic about the passenger numbers that it was likely to pass through the airport in 2023. At this time, management increased both the forecast and narrowed the range from what was 58-73 million to 70-78 million compared with 81 million in 2019. The latest data suggests that for the year to date passenger numbers are at 96% of 2019 levels, with May and July at 99%, implying a full year outcome of closer to the top end of the forecast; perhaps it is not only the Bank of England that needs a review of its forecasting accuracy.

Dislocation always provides an opportunity and here, and also entirely predictably we have seen Ryanair since January report passenger numbers that on average have been some 31% above the levels reported in the same period in 2019.

Some airlines have clearly continued to struggle regarding on time performance and cancellations and there has been a lot of “finger pointing” where there have been some legitimate complaints over air traffic control, even before the ongoing NATS debacle.  With insufficient capacity some of the issues have been the result of previous and indeed current management decisions and actions often resulting from a shortage of capacity or trying to do too much with the fleet and other resources they have. Here is not the place to name and shame, although there is plenty of published material let alone social media to be able to take an informed view.

Whilst we have seen easyJet, where network passenger numbers in June were 91% of those in June 2019, take out some 1,700 Gatwick flights in July and August to improve their resilience, it has nott meant that the last flights of the day are often still not substantially late.

A review of for example Flightradar 24 data shows that whilst the EU261 compensation bill is likely, until last weekend, to be lower than it would have been, based on the trends of performance in June, the impact of many more flights arriving back after 23:00 than scheduled is clearly an inconvenience and an annoyance to passengers but also an increasing focus of attention locally and not helpful when Gatwick is now moving ahead to get approval for its second runway. It is interesting the whilst the UK Department for Transport, following a consultation on night flights, noted that the business models of low-cost airlines have less resilience to recover from delays, which may be a way of suggesting that they are trying to do too much with too little but where not all are uniformly impacted.

The mantra of many managements as the industry began to recover was that they would “build back better”, notwithstanding whatever that might mean it is fair to say that in the majority of cases there is very little evidence.

Of course, whilst as passengers we all have different wants and needs beyond a safe flight, it is perhaps true that we will all want best value and on time performance, but whether “things can only get better” remains to be seen and taking an alternative view to the Gordon Gekko in “Wall Street", greed is not good when passengers believe that they are being “gouged” around ancillary charges.  

Competition is undoubtedly good for the customer and airline managements forget at their peril that where choice exists they will vote with their feet and their wallets something that will become ever more evident as normal conditions return.

www.ctaira.com

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READERS' COMMENT

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Jeff Singer, wembley

Chris Tarry alluded to the NATS/ATC problems. The trouble is that the compensation issues will not go away and in the end only the lawyers will benefit It is very sad for travellers caught out, but hard on crew and res staff too.