Earlier this month, Southwest airlines abruptly cancelled more than 2000 flights due to weather disruptions, costing them $75 million and a significant drop in their stock. Frustrated customers missed weddings, doctors’ appointments, trips to Disneyland, and they lost thousands of dollars rebooking hotels and flights. Southwest said they cancelled the flights due to weather disruptions, and now American Airlines is suffering the same issues. Over the weekend, American Airlines cancelled more than 1,400 flights.
The company blamed the cancellations on staffing and weather issues just like Southwest, and it’s the latest airline meltdown as carriers struggle to keep up with travel demand. American Airlines COO said they didn’t have enough pilots or flight attendants to keep operations running on the weekend. “With additional weather throughout the system, our staffing begins to run tight as crew members end up out of their regular flight sequences.”
While these airline companies claim “weather” is the chief cause of their issues, the problem appears to be much deeper. Labor shortages and supply chain issues are affecting the economy across the board. What if the weather just exacerbated these underlying issues?
The pandemic significantly transformed the labor market, and those transformations are becoming more apparent. Every day, people are quitting their jobs. They leave their jobs right when economies start to recover, just as the demand for workers increases. Changing demographics such as the aging of workers and requests for better compensation and more flexible working arrangements are all contributing to the shortages.
Hopefully, your flight didn’t get cancelled. Southwest cancelled my flight a couple of weeks ago and cost me $500 buckaroos!
I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.