IROPS-This Summer Was Not as “Irregular” as You May Have Thought
We’ve spent some time at Hospitio analyzing the data and industry events that prove what many air travelers instinctively grasp: the airline industry’s recovery is spotty at best and will remain so until COVID abates and – perhaps more importantly – airlines can scramble back from some of their own self-inflicted wounds.
The former is mostly out of the airline industry’s hands – COVID will do what COVID will do and airlines are, for the most part, doing a solid job with measures on COVID containment and prevention in their staff and on-board. Those efforts, and the vaccines, unleashed a tsunami of COVID-induced pent-up demand among leisure travelers this past summer, driving air traffic to unforeseen and arguably unprecedented numbers. It’s not surprising: everyone wanted out of town after a year in lockdown.
The leisure travel experience this summer exposed a trend we’ve been concerned about for some time. It brought with it a slew of embarrassing and sometimes heartbreaking stories rooted in what we in the business call IROPs (pronounced Eye’-rops), which stands for Irregular Operations at many airlines. They’re also known as OSO’s (Pronounced O’-Ess-O’s), which stands for Off-Schedule-Operations at other airlines.
IROPS and OSO’s can be blamed on a few usual suspects: weather, maintenance issues, crew scheduling irregularities, etc. Airlines plan for these and can usually recover with minimal inconvenience to customers. This summer, however, we saw unprecedented numbers of cancelled and rescheduled flights (most with roots in a weather event). These led to incredible lines at understaffed ticket counters at airports and under- or unstaffed desks on phones – customers at one airline reported hours-long waits just to get through to a person in Reservations.
The result was a trail of broken vacations and family visits, and a reputational hit to the operational integrity of the airlines. We won’t name the names of the airlines, because they know who they are, and thanks to CNN and the rest of the media, so does everyone else.
Why did it happen? In a nutshell: people.
Airlines divested themselves of tens of thousands of employees between the onset of COVID and this summer, with Airlines for America noting in a Sept. 15 report that U.S. airline full time equivalent employment remains 64,000 people below March 2020 numbers.
Many of those who left were very senior people in both management and on the operations side, enticed by early retirement packages or buyouts to leave the business. In addition to the sheer number of bodies cut, these employees took a tremendous amount of institutional knowledge with them, so when the lines started forming at ticket counters and reservations centers, there simply weren’t enough people to knowledgeably handle the load. With the COVID labor shortage, this may take time to fix.
At the same time, some airlines took the COVID downtime to change up their fleet types, that is, to retire some older airplanes and buy or lease different ones. This was a smart thing to do, but created significant issues in the pilot workforce. Many pilots would need to be retrained on the new types of equipment, often without the newly retired or laid-off check airmen required to train and certify them. Crew shortages ensued, and a training backlog continues (See Figure 1 for an example from Delta’s financial reports and highlights).
Still, some airlines refused to be cowed by these realities and – in an understandable bid to raise revenue this summer – scheduled their airlines back at the same or near the same capacities as they enjoyed before COVID. Others identified the problem earlier in the fall and adjusted their schedules to avoid an unreliable operation.
The results for the former were predictable – we have the photos and the data. Some airlines – already running tight on resources – endured multiple days of cancellations and delays from what might otherwise have been manageable weather or maintenance events.
Now comes the fall and winter, when the airline industry’s bread-and-butter business travel typically picks up. COVID certainly bears some responsibility for sluggish bookings here as well, as the Delta variant forces businesses to re-think their return-to-the-office plans and staff travel. Airlines, event coordinators, hotels, convention planners – all will repeat the same story. They may have put an initial brave face on their forecasts, but they really can’t continue to forecast a booming business travel market with any real confidence, and so far, the numbers aren’t looking good. Airlines for America noted in the same Sept. 15 report that fall bookings for business travel are down by double digits versus pre-pandemic levels.
And maybe that creates an opportunity. Perhaps airlines can use this time to get back on track and re-inspire the confidence of their most valuable customer: the business traveler.
Business travelers value many things but the most important may be reliability – the knowledge that they will get out on time, safely, and return when they planned to return, with their bag. Business travelers understand IROPS and OSO’s and also account for that in their travel plans. But as a rule, as they consider resuming regular business travel, they will place value on the airlines that can live up to their promise to reliably and safely transport them where and when they need to go.
Airlines now have the opportunity to build those schedules and rebuild the staffing levels that can reliably fly them. At least one airline has gotten that message and has already announced scheduled reductions for the fall of 2021, and most likely they might continue the reduction through early 2022. This builds reliability into even a reduced schedule, which may give customers the sense that they will actually get out and back, on time.
We at Hospitio have tools and the experience that can help airlines ease that transition, from crew to fleet to airline scheduling. So don’t make your operation more irregular than it should be! Give us a call.
Hospitio is a global consulting firm with offices in the U.S., Europe, Latin America, and Asia offering consulting services in aviation, transportation, hospitality, cargo and logistics, travel technology, and tour and cruise. The firm specializes in strategic commercial consulting, operations consulting, as well as with organizational staffing and development. You can learn more about Hospitio at www.hospitio.com.