U.S. Airlines Face A Vulnerable Aviation System In 2023

United Airlines aircraft in flight

United Airlines has 25% more spare aircraft than prior to the COVID-19 pandemic.

Credit: Joepriesaviation.net

A far-reaching technological failure at the FAA and Southwest Airlines’ historic meltdown during the recent holiday season have put a spotlight on what one U.S. airline chief executive has aptly described as the fragile aviation system.

Delta Air Lines CEO Ed Bastian offered that assessment in December, before Southwest’s operational chaos and the outage of the FAA’s Notice to Air Missions (NOTAM) system on Jan. 11, which triggered a grounding of departures that lasted for hours.

  • Carriers call for more support for the FAA after the NOTAM failure
  • Delta, United and JetBlue are adjusting expectations to a new operational reality
  • Southwest is taking a different approach to restoring operational order

But in reality, those were just the latest episodes of airlines battling internal and external constraints that continue to create headwinds in meeting the demand for air travel.

“In my opinion, 2022 was the most difficult operational year in our history and was capped off by a severe winter storm over the holidays,” Bastian said during a recent earnings call with analysts and investors.

Bastian and other U.S. airline CEOs used the NOTAM outage as a rallying cry to push for more support for the FAA. The need to modernize the U.S. air traffic control system has been discussed for years, and the NOTAM failure was a crystal clear example of the challenges the agency faces in working with systems “that aren’t as resilient as they need to be,” Bastian concluded.

“[They are] doing the very best they can with what they have, but we need to stand behind the FAA. And we need to take them off the kind of year-by-year funding it seems like they go through that’s caught up in political negotiations and realize the importance of having a strong aviation infrastructure,” Bastian said.

United Airlines CEO Scott Kirby echoed Bastian’s comments in his company’s first-quarter earnings call. “Many of us in aviation have been saying for a long time that the FAA needs more resources,” he said.

Kirby noted that the FAA’s budget, in real terms, is lower than it was 20 years ago, while the agency’s workload is significantly higher.

The United CEO noted that huge resources have been dedicated to space launches, drones and thousands of individuals working on aircraft certification programs in the aftermath of the “[Boeing 737] MAX disaster.” The agency “has been asked to do more, and they’re doing it with less money,” he said.

But the FAA’s challenges, which are significant, are just one of many factors fundamentally changing the U.S. aviation system. Kirby cited pilot constraints and supply chain bottlenecks as limiting airlines’ ability to grow. Given those limiting factors, he said, the industry’s capacity aspirations for 2023 are unachievable.

United has determined that it needs to “carry about 5% more pilots per block hour than pre-pandemic,” Kirby said. Air traffic control challenges are also increasing airlines’ taxi and en route flight times, he added.

“So the same number of block hours probably produces 4-5% fewer [available seat miles (ASM)],” Kirby said. “Put it together: You need 10% more pilots and 5% more aircraft to produce the same number of pre-pandemic ASMs.”

Another change United has instituted is to have roughly 25% more spare aircraft available than before the pandemic.

“One lesson learned during the pandemic recovery is that it is both economical and profit-maximizing to provide a cushion in our aircraft utilization,” United Chief Financial Officer Gerald Laderman said during the earnings call. “Instead of pushing utilization to its theoretical limit, we are focused on protecting our reliable operation.” He noted that such a focus minimizes delays and cancellations that would otherwise drive higher costs such as overtime and accommodations expenses.

Other airlines also are approaching their operations this year with a certain level of caution. “I think we all in the industry owe it to our customers to make sure we don’t fly in excess of our capabilities,” Delta’s Bastian said.

JetBlue Airways also intends to be more conservative in its planning, President Joanna Geraghty said during a Jan. 26 earnings call. One measure being taken includes operating a higher percentage of out-and-back flights. “That’s a really important part of how we plan the schedule, particularly with the airspace we fly into, so that if we do get into trouble we can cleanly cancel a flight,” she said. JetBlue’s largest base, as measured by departing frequencies, is New York’s John F. Kennedy International Airport, according to the Aviation Week Network’s CAPA – Centre for Aviation. The New York airspace corridor is one of the busiest in the U.S.

The airline has introduced new technology, too, “which enables us to repair canceled flights and broken crew pairings more quickly,” Geraghty said. “Which ultimately means we can recover faster and take advantage of the resources that we do have, without having those resources time out or lose track of them.”

For United’s Kirby, the new reality is simple. “Our industry has been changed profoundly by the pandemic, and you can’t run your airline like it’s 2019 or you will fail,” he said.

But Southwest, which was forced to cancel 16,700 flights during the December holiday period, is confident that sticking to its 2023 growth plans will fortify its operational reliability. The airline expects to increase its capacity 16-17% year-over-year in 2023 compared with its original growth estimates of 15%. The increase is attributable to the high number of flights the carrier was forced to cancel at the end of last year.

Southwest CEO Robert Jordan said on an earnings call that almost all of the airline’s planned capacity growth “is going into restoring the network. It’s going into existing city pairs, adding depth and breadth.”

That network restoration “should help fortify the operation with better itineraries, depth and reaccommodation options for customers, crews and aircraft,” Southwest Chief Operating Officer Andrew Watterson said on the same earnings call.

Southwest is working to ensure that it can avoid another operational meltdown of the magnitude that occurred at the end of 2022. It has launched several internal initiatives and hired an outside firm to assess the event and make recommendations to prevent disruptions.

The carrier also is working to address what it calls a “functional gap” revealed in its crew scheduling software during the wave of cancellations, Watterson said. The large number of close-in cancellations the airline experienced disrupted the automation used for crew rescheduling. “When we lost the automation, there’s just not enough hours in the day for crew schedules to catch up manually,” he said.

Even as U.S. airlines adjust to new operating realities this year, Bastian remains optimistic about the long term. “I believe our industry will see tens of billions of dollars in incremental demand in the next few years coming out of the pandemic,” he said.

Lori Ranson

Lori covers North American and Latin airlines for Aviation Week and is also a Senior Analyst for CAPA - Centre for Aviation.