The snap back of travel: Airlines’ ability to keep pace

Summer travel in 2022 was filled with crowded airports, delayed flights, and unhappy customers—but airlines can turn the situation around and build greater capacity for the future.

Last summer, we wrote about the looming travel boom and whether or not the travel industry would be ready. Unfortunately for the industry and its customers, headlines from summer 2022 were filled with stories of long queues, delayed flights, and lost bags—leading to a rise in customer complaints (Exhibit 1). 1 Airlines and airports point to staff shortages across the ecosystem as a major cause of disruption. While labor is an important factor, the problems and solutions run deeper than filling open roles. We present four non-labor-based perspectives on the problems facing the industry and offer a path to resolution.

Post-COVID-19, US air travel consumer complaints increased significantly.
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This is not just a labor shortage issue, but a digital capability gap

Sidebar

Long airport queues and extended hold times became a hallmark of air travel in summer 2022 which frustrated passengers and airline employees alike. While airport and call center labor was partially to blame for this, it wasn’t the only cause. Most passengers contact the call center or an airport representative because the transaction they need cannot be completed online or on their phone. The fact remains that most airline online platforms are only capable of a small percentage of all possible transactions, leading to increased demand during times of disruption.

While the complexity of legacy systems is a challenge, if employees can be trained to manipulate those systems, so can a web engine— which could increase service levels and leave airport and call center staff to manage exceptional cases. 2 This is also true of the complex activities to manage daily operations. Better prediction and optimization tools could prevent disruption before it occurs.

Assumptions about how people fly may have outlived their usefulness

Airline systems and most of operations—including crew planning, maintenance planning, and ground staffing—run on static assumptions. Block and turn times, bags per passenger, passenger arrival rates and connection times, check-in throughput time, and employee absenteeism are the inputs from which airline planning systems run. Typically, these assumptions are based on historical norms and trends that may be tweaked once every year or two. 3

But what happens when history cannot guide a situation, like the return of travel? The industry may need to get comfortable with moving to scenario-based planning to flip the script. Instead of choosing a discrete input, it may be better to ask questions such as:

  • How high would absentee rates need to go to cause a grinding halt in operations?
  • If passengers show up an hour earlier to the airport, what happens to security queues at 6am?
  • How would a shift in the mix of leisure passengers to business passengers affect bags per passenger?

Thinking and planning for scenarios requires agility and digital capabilities. This could help airlines avoid mishaps and keep operations running smoothly.

Greater throughput and efficiency would reduce the demand for staff that aren’t available

As we’ve seen with supply-chain organizations, bottlenecks can ripple through the system—and often seemingly logical solutions can make things worse. During the summer, many airlines publicly told passengers to arrive at the airport earlier. This exacerbated the problem with excess queuing—creating backlogs that are difficult to clear. By contrast, innovative and customer-friendly organizations in the attractions industry set up reservation systems for checking in and held people to their allocated time as a way to manage queues.

In another example, many airports shut down the express “pre-check” lines. But rather than making the situation more equitable, this removed their highest throughput lanes, and caused bottlenecks at security. Many airports viewed longer security times as unavoidable as inexperienced passengers returned to travel. 4 However, a lean approach could have improved the problem: by setting up triage stations, sharing videos of the check-in process to prepare customers, creating special sleeves for laptops, and other quick solutions, airports might have been better equipped to manage operations.

All parties should be held accountable for ecosystem failures

The past few years have seen breakdowns in the broader ecosystem that supports airline operations, including airports, air traffic control (ATC), and vendors. While governments in many locations supported airlines during the COVID-19 pandemic, airports—and particularly private airports—received less support, leading to deep furloughs and underinvestment. Such airports have been understandably harder to scale as demand returns. Similar challenges exist in ATC networks that underpin safe and reliable operations.

Further, some governments put airlines and airports in a bind by rapidly changing protocols. Many airlines told governments the same thing: Don’t lift protocols without warning because it will trigger an avalanche of demand. Yet nearly all governments did so.

All of this led to increased pressure from the beginning of the journey at check-in and security to the end at customs, immigration, and baggage claim. Coupled with outdated assumptions, this situation contributed to many passengers becoming stuck in long lines, stranded without baggage—and fed up with travel.

A potential path forward

While labor is a real and pressing problem, these four non-labor-related challenges may also present solutions that can help airlines improve performance for winter and next summer—and avoid cutting flights and putting further pressure on profitability. The solutions are not easy, and will likely require commitment from leadership across the ecosystem, but they are more controllable and cost effective than simply focusing on labor.

Automate and digitize

The current challenges of staff shortages, long queues, delays, and unhappy passengers point to a need for change, and also present opportunities for automation. In a fully staffed environment, there is a barrier to automation in that it often leads to fewer jobs and, potentially, layoffs. But in a labor shortage, automation can result in fewer jobs needing to be filled. While airlines and airports are short of staff, they can use this opportunity to automate and digitize.

There are three major areas that could have significant impact. First, airlines could address the digital capability gap around planning and recovery tools. Given that airline networks, assumptions, and operations have changed significantly—and airlines have lost talent across operations—the same approaches used to plan and recover in the past are no longer applicable today. Capabilities like digital twins, which emulate real-world environments, can speed this learning process.

Second, there is a need to improve self-service and customer-support tools to reduce queues when disruptions do occur. Third, technology can be a key enabler for greater airport throughput by automating key processes (such as boarding and document checks) and smoothing demand so it is more manageable.

Plan for the future, not the past

In an uncertain supply-and-demand environment, simply rolling forward historical schedules may no longer be feasible. Airlines could redesign their scheduling processes around the customer and build a smarter schedule for peak operations. For example, schedule simulation can enable rigorous testing to identify and mitigate points of failure, with greater flexibility to respond to changing conditions.

This likely also requires a rethink of traditional scheduling assumptions, like static minimum connect times (MCTs). Dynamic MCTs that respond to the airport’s needs and to alternative recovery connections could reduce the number of stranded passengers. For example, tighter connections may be possible when there are many recovery options but should be loosened when delays would create over-night disruption events. Such forward-looking planning could also be valuable across operational departments that may need to simulate different levels of vacancy and absenteeism to understand their breaking points.

Focus on throughput and efficiency

Airlines and the ecosystem could reinvigorate lean approaches to help improve efficiency across airport operations. This would require relooking at core business processes, and finding ways to refine or redesign these to better fit the current operational environment. Addressing processes related to turning the aircraft, managing below-the-wing operations, and streamlining queuing across the airport could help improve the customer experience as well as operational predictability. Large-scale change will likely require breaking down traditional silos and focusing on outcomes, bringing together stakeholders from across the organization to solve operational challenges.

This could be complemented with a focus on reducing complexity, including clean sheeting legacy functions to remove waste. Particularly when combined with digitization and new planning approaches, this can greatly increase throughput and reduce bottlenecks, thereby improving performance and reducing headcount needs.

Work across the ecosystem

Finally, collaboration across the ecosystem by policy makers, ATC, the military, airports, and airlines may be critical in changing the current trajectory. Given the shared nature of resources, this would involve more transparent communication on constraints, greater sharing of data, and better alignment of policy to action.

For example, in the US, the challenges in one state—including ATC staffing shortages and airport constraints—had impacts that spread across the country. Greater visibility into the extent and duration of constraints would have allowed more proactive adjustments along with better coordination on scheduling (such as airspace closures) and policy decisions (such as changing constraints to allow passengers to choose alternative destinations). There is a need to strengthen existing bodies (for example ATC collaborative calls, IATA/ICAO) and data-sharing approaches (such as post mortems on mistimed ground delay programs) to enable collaboration while preserving competition.

Smooth operations are good for the customer—and business

A great operation and customer experience is not just good for customers but also for the bottom line. Through digital enablement, and the measures outlined above, we believe that airlines could reduce controllable delays (i.e., those delays that airlines can affect and that are not impacted by events like weather) by between 10 and 20 percent. Given that controllable delays account for roughly 60 percent of all delays, reducing them can create at least a five-point improvement in on-time performance—helping airlines to save millions of dollars annually, and more importantly, improve the customer experience (Exhibit 2).

Airlines could realize savings by improving on-time performance by five points.
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While the summer of 2022 was certainly challenging for airlines, it can become the catalyst for a step change in performance that would be welcomed by customers, regulators, and airlines alike. The adjustments may require investment and dedication to building new capabilities—but the improvement in customer experience and operations will make the change worth it for the long term.

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