The U.S. seems to suffer from chronic Nothing Works Syndrome.
By Derek Thompson The Atlantic June 26th 2022
“The very first symptom of the general collapse was an old one: nothing worked.” The sentiment is old—it comes from Doris Lessing’s 1969 novel, The Four-Gated City—but it’s hard to think of a better epitaph for the economic vibes of 2022. From the oil markets to the baby-formula markets to the general sense of safety and disorder, the U.S. seems to suffer from chronic Nothing Works Syndrome.
The latest victim of acute NWS is air travel. Around the world, security lines are getting brutally long and cancellations and delays are spiking. The major carriers JetBlue, American Airlines, and Delta canceled nearly 10 percent of their flights last weekend, creating mayhem at major airports.
In an interview for my podcast Plain English, I spoke with Scott Keyes, the founder of the Scott’s Cheap Flights newsletter, about why air travel has been such a mess this summer. This transcript has been edited and condensed.
Derek Thompson: Scott, what’s happening and why?
Scott Keyes: The amount of turmoil in the airline industry over the past two years is unlike anything we’ve ever seen in travel. The 9/11 attacks caused a 7 percent drop in overall travel. But 2020 travel was down 70 percent. Airlines were worried about surviving. That meant laying off staff, shedding pilots, selling airplanes, and retiring aircraft. Now, as travel rebounds, we are paying the price.
Delta shed 30 percent of their employees—almost 30,000 people cut from their staff. American Airlines laid off 30 percent of their staff, through buyouts, early retirements, or otherwise. Airlines were trying to become as lean as possible to reduce those operating expenses with the anticipation that they were not going to be making much money. They also retired older planes.
Those decisions certainly helped improve the balance sheet throughout 2020. But would they have made the same call if they had known how quickly travel demand would rebound? Almost certainly not. They assumed that this was going to be a six-year recovery period, not an 18-month recovery period. So when travel demand started rebounding much quicker than they anticipated, the airlines were caught flat-footed.
Thompson: Why is it taking so long to adjust? Why is it so hard to hire pilots or bring back more airplanes?
Keyes: Being a pilot is not an entry-level job. It takes years of training. There are many regulatory requirements, like a mandatory retirement age for pilots: 65 years old. There are mandatory training requirements for U.S.-based pilots. They have to fly 1,500 hours before they’re allowed to pilot those commercial planes.
Similarly, Boeing doesn’t have tons of 787s or 737s sitting in a warehouse waiting for airlines to come pick them up. There’s a years-long delay in a manufacturing process plagued with supply-chain disruptions, just like so many other parts of the economy.
Thompson: The industry is so woefully understaffed that whenever there’s a storm, or a pilot who calls in sick, there’s no redundancy or resiliency in the system, and you get these cascading cancellations. But wasn’t it obvious 18 months ago that we’d have vaccines? Wasn’t it obvious six months ago that Americans wanted to get out of the house? Why is all this mayhem happening now?
Keyes: There’s a labor-supply issue, not just for airlines but also the TSA. If you live in Milwaukee and you’re looking for an entry-level job, you could become a transportation security officer for $19.41 an hour, or you could go on Amazon’s website and see that there’s a job in the area for $19.50. Would you rather help load and unload bags outside in the dead of winter in Milwaukee, or work in a climate-controlled environment in a warehouse for Amazon? That’s the trade-off a lot of folks are making. Labor shortages cause delays and cancellations. In normal times, airlines might have a reserve crew of pilots or flight attendants that they can call in. But now there is not the reserve in place to bridge the gap. The result is a huge swath of delays and cancellations.
Thompson: Laurie Garrow, a professor at Georgia Tech, directed me to FlightAware, a website that tracks airline-industry statistics. On any given day, it seems normal to have a cancellation rate of about 1 percent—or one cancellation for every 100 scheduled flights. Last Thursday, JetBlue canceled 14 percent of its flights. Last Thursday and Friday, American canceled 10 percent of its flights. On Friday, Saturday, Sunday, Delta canceled 8 percent of its flights. Meanwhile, Frontier and Spirit canceled just 1 percent of their flights in that time. Why are the major carriers having these major problems right now?
Keyes: Today’s airline that gloats about not having cancellations is tomorrow’s airline that’s experiencing a meltdown. I don’t want to pretend that Spirit and Frontier don’t experience meltdowns. They absolutely do. That said, a few factors can explain why we’re seeing higher rates of cancellations among legacy full-service airlines. First, many of the budget airlines like Spirit already trimmed their summer schedules when they realized they didn’t have enough pilots and crew to operate the schedule they had planned. The legacy full-service airlines can suffer sometimes from hubris.
Second, many of the legacy airlines have hubs in crowded corridors like New York, Chicago, and Boston, which can suffer from compounding cancellations when there’s a thunderstorm [which are more common in the summer]. Those cancellations beget more cancellations. A flight from JFK to Miami that gets canceled results in a further cancellation for that flight out of Miami.
Thompson: Has anything changed about air travelers? Are we doing something different in 2022 that is contributing to these delays?
Keyes: Leisure travel has fully rebounded, whereas business travel is still down 30 percent. Now, why does that matter? Because leisure travelers tend to be more inexperienced when it comes to travel. They need more support from the airlines handling their itinerary ahead of time. They might need more time going through security. They don’t remember to take their shoes off or to take their laptop out. When each person takes an extra 20 seconds, you multiply by 3,000 passengers, and these little micro events matter at scale.
Relatedly, the two airports with the biggest growth since the summer of 2019 are Miami, up 17 percent, and Las Vegas, up 10 percent. San Francisco is down 26 percent. Detroit is down 25 percent. Chicago O’Hare is down 18 percent. The business-heavy destinations are down, and the leisure destinations are up.
These changes have bigger knock-on effects for some airlines than others. Historically, the budget airlines have had the leisure traveler as their bread and butter. Spirit Airlines does not have a significant amount of business travel within its portfolio. Conversely, American Airlines and Delta make the most money from business travelers, who are up to seven times more profitable on a per-person basis. And they orient their entire operation around serving those business travelers and fly more to Chicago, San Francisco, and New York.
Because a pandemic came along that crushed business travel, Delta and American and United are now playing away games. The budget airlines have home-field advantage. And budget airlines have basically eaten all the growth over the past three years. Allegiant [flights] are up 17 percent since 2019. Spirit is 7 percent. Frontier is up 6 percent. Whereas Delta, United, American are down.
Thompson: To what extent do you think regulatory policy is making America’s airlines particularly fragile to the sort of problems we’re currently experiencing?
Keyes: One of the front-and-center issues discussed in the airline industry right now is this question of pilot training. Is 1,500 hours the proper amount of air time we should be expecting from pilots before we certify them to fly commercial jets? On the one hand, it’s easy to say, “You can’t be too careful.” Just imagine the attack ads if somebody votes to decrease the training requirement, and then all of a sudden there’s a crash. The optics are horrendous. On the other hand, the U.S. is a bit of an outlier. Most other countries do not require anything near this level of training ahead of being certified. The U.S. historically has not required that level of training. And we let foreign pilots fly to JFK and SFO and LAX without this requirement. All that said, there’s still no quick overnight fix that will immediately get you more flights, more pilots, and a greater supply of air travel. Certainly not for this summer.
Thompson: So when does this end? When can we expect traveling to feel more normal?
Keyes: Cheap flights aren’t gone forever. They’re just gone for this summer. The rolling delays and cancellations you’re seeing are predominantly a side effect of the demand for travel right now. So many folks are making up for trips they haven’t been able to take over the past couple of years, and summer’s always the most popular time of year to travel. By mid-September and beyond, you have less people traveling. We’ll have more pilots and planes in reserve to be able to come in when there is a thunderstorm, or an IT meltdown. We’ll have more reserves to help prevent a catastrophic wave of cancellations and delays. So, bad news for the short term. Good news for the fall and beyond.
The huge reduction in global travelers has proved positive for many places in the world. Now some locations are either maintaining pre-existing limits on visitors or introducing new ones.
Whether the goal is to protect sensitive environments or provide a more enjoyable visitor experience, an increasing number of destinations around the world are limiting the number of visitors they welcome each day.
In some cases, these tourism caps have been around for more than a decade, in other cases, pandemic travel patterns have encouraged new restrictions to take effect. Regardless of when or why the visitor caps were put in place, having to work with them means spending a bit more time planning your trip, such as booking a timed-admission ticket months in advance then planning your entire trip around it. But, is that such a bad thing?
Visitation caps make for an inherently less flexible travel experience but as well as minimizing crowds and putting less strain on staff (which continue to be in short supply), limiting the number of visitors also helps to preserve and conserve natural resources.
If thousands of people were to descend on an ancient archeological site that can only support a few hundred visitors, impatient tourists might stray from designated paths and potentially trample sensitive areas or wander onto historically-significant ruins and artifacts. Staff would struggle to manage crowds and clean up the mounds of trash that would, no doubt, be produced, and the visitor experience would suffer due to long lines, cramped pathways, overflowing garbage cans, and overcrowded (and under-serviced) bathrooms.
Opting for lesser-known and off-the-beaten-path destinations is a great way to minimize overcrowding but, let’s be honest, some popular destinations just don’t have a less-visited alternative so if you want to explore them, you’ll have to work within the visitation cap restrictions. Here are a handful of alluring places to visit around the world that currently (and possibly indefinitely) impose tourism caps.
Glacier National Park, Montana, United States
As one of the most popular national parks in the United States, Glacier National Park has long suffered from over-tourism. Parking lots are often full by sunrise, some trails see more than 1,000 hikers a day, and entire areas of the park are temporarily restricted until traffic congestion clears up. As Americans who were unable or unwilling to travel abroad sought out outdoor spaces closer to home, Glacier saw an especially steep jump in the number of visitors during the COVID-19 pandemic. As a result, the country’s 10th national park imposed an online reservation system for the popular Going-to-the-Sun Road corridor during peak visitor season (late May to early September 2021).
Lord Howe Island, Australia
Rising from the Pacific some 370 miles northeast of Sydney, Australia, lies Lord Howe Island, part of a group of isolated islands born from volcanic activity that now appear on the UNESCO World Heritage list. This semi-tropical island is less than seven miles long and two miles wide, but the island’s status as a Marine Park, and the fact that nearly 75% of its land is classified as a Permanent Park Preserve, makes this protected piece of paradise perfect for nature and wildlife lovers. Rare flora and fauna blanket the island while the world’s most southerly coral reef encompasses surrounding waters. Tourism is the main industry supporting the island’s 400 residents, but a strict tourist cap allows only 400 visitors a night. The cap (which is equal to the number of available beds on the island) was put in place to protect the island's delicate ecosystem and is instrumental in conserving the high number of threatened and endemic species that have evolved to live in the area.
Machu Picchu, Peru
Often considered to be the poster child of over-tourism, Machu Picchu customarily received more than 4,000 visitors per day. When the site opened at 6am, there typically were hundreds of tourists already lined up at the gate, all attempting to be the first to enter. Tickets were issued as half-day admissions though the four-hour time restrictions weren’t strictly enforced so most visitors arrived early and stayed as long as they liked.
As a result of the COVID-19 pandemic, the site closed in March 2020, as did pretty much everything in the world. Four months later, Peruvian authorities decided that when the site re-opened, the number of daily visitors would be limited to 2,244 but it didn’t tackle the problem of everyone visiting at the same time (usually early in the morning). Now, a limited number of tickets are issued in time blocks so if you buy a ticket for 10am, you’re only allowed to enter between 10am-11am. Tickets often sell out several months in advance and are not available on-site so if you are planning to visit, it would be wise to confirm your admission ticket before booking your flight or accommodations.
Tourism to Antarctica was growing steadily until 2009, when the 28 nation members of the 50-year-old Antarctic Treaty decided to limit tourism in the region to protect the continent’s fragile eco-system. Changes included banning ships with more than 500 passengers from landing sites, restricting landings to one vessel at a time, limiting the number of passengers on shore to 100 at a time, and requiring at least one guide for each 20 visitors while ashore. Given the extremely harsh environment, the only way to get to Antarctica is to go with a tour operator or organization that has been approved by its national authorities, all of whom must comply with the new regulations. Given the visitation caps and requirements have a larger impact on the experience of visitors of large ships, if you want to be able to dock and explore on foot, your best bet is to book a trip on a small ship.
Officially the Republic of Seychelles, but better known simply as Seychelles, this archipelagic island country consists of 115 islands in the Indian Ocean, about 1,100 miles southeast of Somalia and northeast of Madagascar. In 2007, the country recognized the problems associated with its swelling number of visitors (which were up 10% over the previous year) and proposed to cap the number of visitors at 200,000 beginning in 2010. The primary motivation for the cap was concern for protecting the environment but it was unsuccessful and visitor numbers reached 250,000 by 2015. While the country has struggled to enforce visitor caps, it has already begun restricting the building of large hotel developments in favor of smaller, locally-run properties.
To “stop the city from becoming like Venice”, in 2015, Barcelona’s mayor introduced a cap on the number of tourists visiting the Catalan capital, which then hovered around 7.5 million annually. The mayor issued a temporary freeze on new developments while deciding which areas of the city could receive more tourists and imposed caps on groups visiting iconic places. La Boqueria market on La Rambla boulevard began limiting groups to no more than 15 people and Gaudi’s Park Güell, formerly free, began charging admission and limiting the number of visitors to 800 per day. Unlike other destinations, which typically impose tourism caps to preserve the environment and make for a better visitor experience, the main motivation behind Barcelona’s caps was a desire to improve the quality of life of residents, who, for years, had complained that tourists had taken over their city and made it unlivable.
By Cassandra Brooklyn, World Nomads.
IATA Reports Strong International Traffic Propels Continuing Air Travel Recovery.
Geneva - The International Air Transport Association (IATA) announced that air travel resumed its strong recovery trend in April, despite the war in Ukraine and travel restrictions in China. This was driven primarily by international demand.
Note: We have returned to year-on-year traffic comparisons, instead of comparisons with the 2019 period, unless otherwise noted. Owing to the low traffic base in 2021, some markets will show very high year-on-year growth rates, even if the size of these markets is still significantly smaller than they were in 2019.
Total demand for air travel in April 2022 (measured in revenue passenger kilometers or RPKs) was up 78.7% compared to April 2021 and slightly ahead of March 2022’s 76.0% year-over-year increase.
April domestic air travel was down 1.0% compared to the year-ago period, a reversal from the 10.6% demand rise in March. This was driven entirely by continuing strict travel restrictions in China, where domestic traffic was down 80.8% year-to-year. Overall, April domestic traffic was down 25.8% versus April 2019.
International RPKs rose 331.9% versus April 2021, an acceleration over the 289.9% rise in March 2022 compared to a year ago. Several route areas are actually above pre-pandemic levels, including Europe – Central America, Middle East – North America and North America – Central America. April 2022 international RPKs were down 43.4% compared to the same month in 2019.
“With the lifting of many border restrictions, we are seeing the long-expected surge in bookings as people seek to make up for two years of lost travel opportunities. April data is cause for optimism in almost all markets, except China, which continues to severely restrict travel. The experience of the rest of the world is demonstrating that increased travel is manageable with high levels of population immunity and the normal systems for disease surveillance. We hope that China can recognize this success soon and take its own steps towards normality,” said Willie Walsh, IATA’s Director General.
Air Passenger Market Detail - April 2022
International Passenger Markets
European carriers’ April international traffic rose 480.0% versus April 2021, substantially up over the 434.3% increase in March 2022 versus the same month in 2021. Capacity rose 233.5% and load factor climbed 33.7 percentage points to 79.4%.
Asia-Pacific airlines saw their April international traffic climb 290.8% compared to April 2021, significantly improved on the 197.2% gain registered in March 2022 versus March 2021. Capacity rose 88.6% and the load factor was up 34.6 percentage points to 66.8%, still the lowest among regions.
Middle Eastern airlines had a 265.0% demand rise in April compared to April 2021, bettering the 252.7% increase in March 2022, versus the same month in 2021. April capacity rose 101.0% versus the year-ago period, and load factor climbed 32.2 percentage points to 71.7%.
North American carriers’ April traffic rose 230.2% versus the 2021 period, slightly above the 227.9% rise in March 2022 compared to March 2021. Capacity rose 98.5%, and load factor climbed 31.6 percentage points to 79.3%.
Latin American airlines experienced a 263.2% rise in April traffic, compared to the same month in 2021, exceeding the 241.2% rise in March 2022 over March 2021. April capacity rose 189.1% and load factor increased 16.8 percentage points to 82.3%, which easily was the highest load factor among the regions for the 19th consecutive month.
African airlines’ traffic rose 116.2% in April 2022 versus a year ago, an acceleration over the 93.3% year-over-year increase recorded in March 2022. April 2022 capacity was up 65.7% and load factor climbed 15.7 percentage points to 67.3%.
Domestic Passenger Markets
Australia’s domestic demand rose 47.5% compared to April 2021, an improvement over the 36.5% rise in March traffic, owing to the lifting of travel restrictions and rising consumer confidence.
Japan likewise saw monthly gains, with domestic RPKs up 57.0% year-over-year, up from a 46.5% rise in March 2022 compared to March 2021.
2022 vs 2019
Total April passenger demand was down 37.2% compared to the same month in 2019, which is an improvement compared to the 41.3% decline for March 2022 versus March 2019.
Air Passenger Market Detail 2022 vs 2019
The Bottom Line
“With the northern summer travel season now upon us, two things are clear: two-years of border restrictions have not weakened the desire for the freedom to travel. Where it is permitted, demand rapidly is returning to pre-COVID levels. However, it is also evident that the failings in how governments managed the pandemic have continued into the recovery. With governments making U-turns and policy changes there was uncertainty until the last minute, leaving little time to restart an industry that was largely dormant for two years. It is no wonder that we are seeing operational delays in some locations. In those few locations where these problems are recurring, solutions need to be found so passengers can travel with confidence.
“In less than two weeks, leaders of the global aviation community will gather in Doha at the 78th IATA Annual General Meeting (AGM) and World Air Transport Summit. This year’s AGM will take place as a wholly in-person event for the first time since 2019. It should send a strong signal that it is time for governments to lift any remaining restrictions and requirements and prepare for an enthusiastic response by consumers who are voting with their feet for a full restoration of their right to travel,” said Walsh.
Navnesh Reddy | The Fiji Times | 31 May, 2022
The Tourism Fiji Corporate Plan 2022-2024 outlines our target of reaching visitor expenditure of $3 billion by the end of 2024.
This was the comment made by Tourism Fiji chief executive officer Brent Hill during the media launch of the two-year road map document in Nadi yesterday.
“Our tourism industry is the heartbeat of the Fijian economy, and we strongly believe that our Corporate Plan gives us a clear vision to work collectively in order to achieve our goals,” he said.
Mr. Hill said the plan would also outline Tourism Fiji’s strategic priorities and would guide them over the next two years.
“It will prompt us to work more sustainably, channel our resources towards the right goals and challenge our team to go the extra mile for our tourism industry and more importantly for Fiji.”
He said the plan and its execution are undermined by the many hundreds of tourism businesses promoting the sector and promoting our country’s unique beauty and depth of experiences we could offer.
Mr. Hill also acknowledged the Pacific Private Sector Development Initiative (PSDI) which funded the Corporate Plan.
PSDI Tourism Expert Sara Currie said, “ADB’s PSDI welcomed the opportunity to work with Tourism Fiji to set targets and goals for the next two years ahead, as Fiji recovered from COVID-19.” she said.
The Corporate Plan document was also yesterday shared with industry stakeholders, media and representatives organizations, who according to Tourism Fiji were consulted and had provided data for the plan.
For a copy of the full plan click below
Luxury travel market could see growth in 2022 as COVID-19 has spurred new consumer trends, says GlobalData
Vicky Karantzavelou | Travel Daily News | 31 May 2022
Despite the demand for luxury travel, there is a growing demographic of socially conscious, high-net-worth consumers who are rejecting overt displays of wealth in favor of inconspicuous and responsible consumption. Their approach to luxury is driven by ethical living, artisanship, authenticity and sustainability.
In the luxury travel market, there has been an influx of consumer travel trends as a result of the COVID-19 pandemic. This includes a boom in private aviation services at the high end of the market, remote working from overseas locations and demand for private buyouts of large villas or boutique hotels, finds GlobalData.
The leading data and analytics company’s latest report, ‘Luxury Travel Market Trend and Analysis of Traveler Types, Key Destinations, Challenges and Opportunities, 2022 Update’ reveals that as luxury travellers resume travelling both domestically and abroad in the aftermath of the COVID-19 pandemic, they may begin to seek experiences that are more immersive and more exceptional than in previous years.
Hannah Free, Travel and Tourism Analyst at GlobalData, comments: “With travellers determined to make up for lost time, 2022 could see an increase in holiday budgets for luxury travellers, with an uptick in demand for ‘once in a lifetime’ adventures. According to a GlobalData poll*, when respondents were asked if their holiday budgets had changed due to COVID-19, 16% reported that their budgets were ‘a lot higher than pre-COVID-19’, while 12% of respondents stated that their budgets were ‘slightly higher than pre-COVID-19’.”
Despite the demand for luxury travel, there is a growing demographic of socially conscious, high-net-worth consumers who are rejecting overt displays of wealth in favor of inconspicuous and responsible consumption. Their approach to luxury is driven by ethical living, artisanship, authenticity and sustainability. Experience is the new currency for these holidaymakers, who seek self-fulfillment through greener travel and eco holidays, while wanting to ‘do good’ for people and the planet. If luxury travel brands ignore this trend, it could put them at tremendous risk of total disconnect with an audience who are looking for sustainable options.
Free concludes: “While COVID-19 has changed many aspects of luxury travel, there are still several defining features which sets the sector apart from mass market tourism. This includes hyper-personalization, exclusivity, unique experiences, intuitive service and the ever important ‘human touch’ element.”
*GlobalData poll – Ended on 17 Jan 2022 (428 Responses).
Jim Hepple is an Assistant Professor at the University of Aruba and is Managing Director of Tourism Analytics.