United Airlines CEO warns travelers more disruptions ahead
The CEO of United Airlines said Wednesday that other airlines won’t be able to handle all the flights they plan to operate this year, leading to more disruptions for travelers.
Scott Kirby said airlines that operate as if this is still 2019, before the pandemic, are bound to struggle. He said the industry is dealing with a shortage of pilots and other workers, outdated technology and strain on the Federal Aviation Administration, which manages the nation’s airspace.
“The system simply can’t handle the volume today, much less the anticipated growth,” Kirby said. “There are a number of airlines who cannot fly their schedules. The customers are paying the price.”
As an example of what can go wrong, Kirby referred to massive cancellations in late December. Southwest Airlines – which Kirby did not mention by name – scrubbed nearly 17,000 flights in late December after a winter storm upset the schedule and overwhelmed the airline’s crew-scheduling system.
“What happened over the holidays wasn’t a one-time event caused by the weather, and it wasn’t just at one airline,” he said. Alaska, Spirit and Frontier also had double-digit percentages of canceled flights in late December.
Kirby made the remarks during a call with analysts and reporters that was billed as a discussion of his company’s fourth-quarter financial results. He struck a contrarian tone. Most airline executives rarely take public shots at their competitors. And they are unfailingly optimistic, often treating massive flight disruptions and other setbacks as freak events caused by Mother Nature or some other factor beyond their control.
Not surprisingly, Kirby said United is taking a different approach. He said it has invested in technology, has more employees per flight than before the pandemic, keeps more spare planes and isn’t pushing the schedule too hard. However, those steps have raised United’s cost to fly one mile, not counting fuel, about 15% above 2019’s level.
United’s rate of canceled flights last year was slightly better than most rivals but not the best. Among the six largest U.S. airlines, Delta canceled 1.4% of its scheduled flights in 2022 while United dropped 2.0%, Alaska 2.4%, American 2.5%, Southwest 3.0% and JetBlue 3.1%, according to tracking service FlightAware.
All of those airlines faced another obstacle last week. More than 1,300 U.S. flights were canceled and 11,000 delayed on a single day after an FAA system that alerts pilots to safety issues broke down, temporarily halting all takeoffs.
Like Delta Air Lines CEO Ed Bastian and American Airlines CEO Robert Isom, Kirby defended the FAA but said Congress doesn’t give the agency enough money to keep up with its growing workload, which now includes monitoring drones and rocket launches and stepping up its scrutiny of operators after two Boeing 737 Max tragedies in 2018 and 2019.
After the stock market closed Tuesday, Chicago-based United reported a profit of $843 million for the fourth quarter and predicted that 2023 earnings will easily top Wall Street forecasts. Still, shares of United Airlines Holdings Group Inc. lost 4.6% on Wednesday while most of its rivals fell by smaller amounts and Delta eked out a narrow gain.
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