Flying on America’s airlines this summer provokes the same conflict of feelings that Woody Allen recalled in a joke in Annie Hall—about two elderly women at a Catskill mountain resort. One says “Boy, the food at this place is really terrible.” The other says, “Yeah, I know, and such small portions.”
In America the urge to fly has never been stronger and yet the misery involved has never been greater, the prices have never been higher and, in coach, the seats are far too small.
Friday, June 30 broke the record for the number of passengers checked through America’s airports in one day: 2,882,915. But that number is a harbinger of something much bigger: Americans have a renewed appetite for air travel, both domestic and international, but our airlines and airports are woefully unprepared to deal with it.
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“The industry predicted a slow, gradual, step-by-step recovery from the pandemic,” says Craig Jenks, a leading air industry consultant with Airline/Aircraft Projects Inc., “and this turned out to be completely wrong. It was more like a snap-back, as soon it was safe to travel, demand came soaring back.”
John Grant, an analyst with OAG, a London-based firm that tracks in real time the volume of international air travel by the number of seats available on every airline in the world, points out that America is particularly ill-prepared for the surge because it has “a broken infrastructure—air traffic control resources are fully stretched, and most airports are under-invested.”
In fact, the technology underpinning flight operations in America, overseen by the FAA, is a patchwork of outdated equipment and long, drawn-out upgrades.
The vulnerability of the system was worryingly demonstrated in January, when all flights in American airspace were grounded (as well as all incoming international flights) for several hours because a system that few people had ever heard of, called Notice to Air Missions (NOTAM) had crashed—the first time American air space had been closed on this scale since the 9/11 terror attacks.
Before any flight is cleared to depart, pilots are required to check with NOTAM for current information on their destination airport—like the status of runways or, if they were to be diverted, alternative airports. The system, launched in the 1980s, had not been upgraded to be compatible with huge advances in cockpit avionics since 1990.
David Grizzle, who served as acting deputy administrator and CEO of the FAA from 2009 to 2013, responding to that failure, wrote in Aviation Week: “Many of the FAA’s most critical facilities are more than 50 years old. Operationally essential technologies are running on microprocessors manufactured 20 years ago. These outcomes are not because the FAA is monumentally incompetent; they occur because the FAA is perennially and woefully underfunded.”
Industry experts would add to that the picture of an agency poorly led by a series of interim administrators with a sclerotic bureaucracy, but they have also long pointed out that the annual congressional budgeting system is so driven by short-term political issues—Grizzle cited “culture war debates that have nothing to do with commercial airline travel”—that the agency has no assured longer-term funding to cover the replacement of systems like air traffic control that are both aging and far behind current technologies.
The FAA prioritizes safety. And, indeed, worldwide airline accidents are near an all-time low: In 2022 the accident rate stood at just 1.21 per million flights. But to ensure safety, the FAA is forced to switch funds from non-urgent programs, like building new airport control towers, to maintaining day-to-day operations that are frequently under strain because of extreme weather events or staff shortages. That just adds to its erratic record of catching up with far more efficient advances in technology.
As for airports, they are managed by a hotch-potch of federal, state, and city agencies. In its new infrastructure program, the Biden Administration directed $25 billion to airports, including nearly $2 billion for improving airport terminals. It may sound a lot, but that money is headed to 42 states and has to support everything from brand-new terminals at major hubs to a new baggage carousel in a small provincial airport. There are no consistent standards to be met on delivery nor any check on the efficiency of the work. Moreover, as programs are delayed by regulatory hurdles inflation erodes the value of the grants.
Domestic air travel was invented here. From the 1930s the rapid evolution of airplanes and airports was driven by the idea of bringing air travel within the means of millions of Americans who otherwise faced long road journeys by car or bus or depended on a rail network that left out vast swathes of the nation. In the last 30 years, Europe, as well as rapidly developing economies in Asia like Japan and China, built high-speed rail networks that serve medium distance intercity routes far more efficiently. In the absence of that infrastructure here, air travel is really a public utility as well as part of the leisure travel business and in trying to meet that double need it is being pushed to its limits.
At the same time, with the dollar riding high in Europe and other prime destinations, Americans are hungry for foreign travel. Passport applications are currently running at 400,000 a week (in the peak period for applications, January to May, the rate was 500,000 a week). The State Department can barely cope. Routine processing takes 10 to 13 weeks and so-called expedited processing, at an extra cost of $60, takes nine weeks.
But there are not enough airplane seats on medium and long-haul routes to meet this demand.
The precipitate fall in world air traffic in 2020, the year before any vaccines were available to control the transmission of COVID-19, and continuing well into 2021 when travel bans essentially left international terminals looking like ghost towns, forced the world’s airlines to ground most of their long-haul fleets. Many airlines, including major American carriers, sent scores of older jets to the graveyard. And they can’t be replaced in any meaningful way any time soon.
Looking into what seemed like an abyss, the world duopoly of Boeing and Airbus, both severely cut back on the production of new jets. That, in turn, led to the attrition of key parts of the long and widely dispersed supply chain behind every airplane as firms cut back or even went out of business. Rebuilding that chain is far from complete. The same shortfall affects engines—new Airbus models are being delayed for want of the engines designed for them.
The greatest demand for new jets is for the two workhorses of the world’s airline fleets, the single-aisle Boeing 737 MAX series and Airbus A320 series. Both are sold out for years. Anyone ordering an Airbus today will have to wait until the early 2030s for delivery. Before the pandemic Airbus was delivering around 60 of the jets a month, that is now down to around 50. (In June the Indian airline Indigo ordered 500 Airbus jets, the largest single airplane order ever.)
Boeing is producing only 38 of its 737 MAX jets a month and it will take until January 2025 to restore production to the pre-pandemic rate of 52 per month. Boeing has also been plagued by long delivery delays caused by quality control issues on its 787 Dreamliner production lines—a jet that is in wide demand worldwide for international routes.
Financially, airlines are looking a lot more secure. In total, the world’s airlines are on track to make an operating profit of $22 billion this year. However, the pandemic cost them at least $180 billion and many survived only with government bailouts. Nonetheless, as the Indigo order shows, big bets are being placed on a future boom for air travel.
In the meantime, what does this mean for Americans planning travel now?
Jenks agreed that all the airlines know they’re in a sellers’ market for years to come. That means historically high fares and very few empty seats on both domestic and international flights.
He points out that while the airlines are happy to say that they are back to levels of traffic last seen in 2019, that is a misleading benchmark. Demand in America is way ahead of that. “The US GDP is now substantially above 2019 and that would normally be reflected in a rise in demand.”
Jenks follows the growth of America’s budget airlines—like Avelo, Breeze, Sun Country, Allegiant and Frontier—that have successfully developed new business models by offering city-to-city nonstops that the legacy carriers had neglected. “The U.S. is still behind Europe in the share of the market taken by Low Cost Carriers (LCCs) and there are growth opportunities, especially at secondary airports.”
I asked OAG’s Grant to dive into his data to back that up. He responded: “There are some 243 routes being operated this July by LCC’s that were not operating last year.” He cited several new high frequency city pairs: Austin, Texas, to Detroit, Michigan; Atlanta, Georgia to San Francisco and Boston to San Jose, California. “It feels like a structural change is taking place, although it’s tenths of a percentage point, and it creates more competition, and that has to be good. Nonetheless he found that legacy airlines had also added 243 routes this year—“a statistical coincidence if ever there was one.”
