Here’s the deal: At the right time for American travelers to get a financial break after a year of rising prices, airports around the world are falling under pressure. Everyone tries to get out of town, often for their first real vacation in two years, but airports around the world don’t have enough staff to handle the rush.
“Over the past few weeks, as passenger numbers regularly exceed 100,000 a day, we’ve started to see times when service has dropped to an unacceptable level,” said Heathrow CEO John Holland-Kaye in an open letter to passengers.
No more than 100,000 departing passengers per day will be allowed to fly out of Heathrow until mid -September, he said. That’s slightly less than the estimated 104,000 a day the airport could host this summer.
The airlines, dealing with their own staff shortages, have already reduced their summer schedules.
But Holland-Kaye said Heathrow’s latest forecast showed an excessive number of seats had already been sold, so airlines needed to stop selling tickets immediately.
Our collective appetite for a great holiday is back faster than airports and airlines can re-hire staff they left in the spring of 2020. You can blame the airlines or heavy regulations, depending on your perspective.
At best, hiring airport workers can be a lengthy process involving background checks and clearances. British Airways told lawmakers in June that it had about 3,000 potential recruits stuck with background checks lasting up to four months. Other airline executives at that hearing were quick to blame heavy regulations for the travel chaos playing out at airports.
And that’s fair-customers want to know that their baggage handlers and ground crew have been scrutinized thoroughly, but in a labor market as tight as this one, it’s even harder to recruit for those positions.
Heathrow “clearly made a mistake,” said Willie Walsh, director general of the International Air Transport Association, the group that represents global airlines. “To tell airlines to stop selling-a ridiculous thing an airport would say to an airline.”
But airlines are to blame for this as well. U.S. carriers fired thousands of workers through buyouts during the pandemic even as they received billions of dollars in payroll assistance, courtesy of the American taxpayer. Now they’re overselling flights that air-traffic controllers can’t keep up with, taking advantage of high fuel prices and strong demand to raise prices.
Bottom line: Be prepared for the excitement of summer travel. And possibly fall as well. If you’re the type of person who flies anywhere for Thanksgiving, aka the busiest travel day of the year, aka the worst possible time to test the poor infrastructure of America’s aviation industry … wow, good luck.
NUMBER OF DAYS: 16
The moves are part of a broader effort to change the company, as outlined in a letter Monday from CEO Howard Schultz, who entered office for the third time this spring. Starbucks should “radically” improve employee experiences, he wrote, adding that the company will strive to create “safety, acceptance and friendliness for our stores.”
To be clear, Schultz is also trying to establish a certain anti-union ethos within Starbucks ’ranks and files-something that has only limited his success so far.
More than two years after the pandemic, many of the businesses profiting significantly from its outbreak are facing reckoning. Quite ironically, investors are retreating into their bunkers, avoiding risky behavior, while consumers are emerging from their hiding places, willing to brag even if the virus remains a threat.
That’s bad news for companies that built their brands on the shaky ground left by the Covid-19 earthquake.
Few companies have had their fortunes closely linked to the pandemic such as Peloton, whose expensive stationary bikes have caused a movement around the idea of staying. For those who can afford to buy internet-connected bikes (and treadmills, but mostly bicycles), they offer a portal to a community beyond its own quarantine pod. There’s thunderous music and a dark room full of sweaty strangers – if you stare, it’s like a party from Before Times.
Unfortunately, the Peloton could not withstand the heat.
Peloton will close its factories operated by Tonic Fitness Technology, a company it bought in 2019. About 600 Tonic employees will be laid off, according to Bloomberg.
Why this is important:
- Peloton has spent hundreds of millions to secure U.S.-based production, believing demand will remain high. It also hopes to avoid the ocean supply chain bottlenecks that have stabilized global trade since 2020.
- But the company is not good at judging society’s desire to exercise alone in front of the screen forever. Subscription sales stop as people return to gyms.
- After trying to fill orders in a timely manner during its pandemic, the Peloton now has a very large inventory.
- This is the first major cost-cutting step from CEO Barry McCarthy, which was installed in February as part of a shakeup that included layoffs of nearly 3,000 employees.
On Tuesday, Peloton shares rose 3.5% in the news. But its stock is still down nearly 95% from its all -time high in late 2020.