United Airlines CEO warns travelers of more disruption

United Airlines CEO warns travelers of more disruption

United Airlines’ CEO said on Wednesday that other airlines will not be able to handle all the flights they plan to operate this year, causing further disruption for travelers.

Scott Kirby said airlines operating as if this were still pre-pandemic 2019 are bound to struggle. He said the industry is struggling with a shortage of pilots and other workers, outdated technology and a strain on the Federal Aviation Administration, which manages the country’s airspace.

“The system just can’t handle today’s volume, let alone the anticipated growth,” Kirby said. “There are a number of airlines that cannot fly their flight schedules. The customers pay the price.”

As an example of what can go wrong, Kirby cited massive cancellations in late December. Southwest Airlines – which didn’t mention Kirby by name – canceled nearly 17,000 flights in late December after a winter storm disrupted schedules and overwhelmed the airline’s planning system.

“What happened over the holidays wasn’t a one-off event caused by the weather and it wasn’t unique to one airline,” he said. Alaska, Spirit and Frontier also had double-digit percentages of canceled flights at the end of December.

Kirby made the comments during a call with analysts and reporters billed as discussing his company’s fourth-quarter financial results. He struck a contrary tone. Most airline executives rarely openly shoot at their competitors. And they are invariably optimistic, often treating massive flight disruptions and other setbacks as unusual events caused by Mother Nature or some other factor beyond their control.

Unsurprisingly, Kirby said United were taking a different approach. He said it’s invested in technology, has more staff per flight than it did before the pandemic, keeps more spare planes and isn’t pushing the schedule too hard. However, those moves have increased United’s cost to fly a mile without fuel by about 15% above 2019 levels.

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United’s canceled flight rate last year was slightly better than most of its competitors, but not the best. Among the top six US airlines, Delta canceled 1.4% of its scheduled flights in 2022, while United 2.0%, Alaska 2.4%, American 2.5%, Southwest 3.0% and JetBlue 3.1% lost, according to the tracking service FlightAware.

All of these airlines faced another obstacle last week. More than 1,300 US flights were canceled in a single day and 11,000 delayed after an FAA system alerting 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 is not giving the agency enough money to keep up with its growing workload, which now oversees surveillance of drone and missile launches and stepping up their control includes the operator following two Boeing 737 Max tragedies in 2018 and 2019.

After the market close on Tuesday, Chicago-based United reported fourth-quarter earnings of $843 million and forecast 2023 earnings to far exceed Wall Street forecasts. Still, shares of United Airlines Holdings Group Inc. fell 4.6% on Wednesday, while most of its peers fell smaller amounts and Delta posted a slim gain.