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Airline ticket prices are expected to keep rising for several reasons


U.S. airlines seem to be poised for a big rebound after some brutal pandemic years. But while consumer demand is up, one notable supply issue could keep the industry from really taking off. Paddy Hirsch and Adrian Ma from our daily economics podcast, The Indicator from Planet Money, explain.

ADRIAN MA, BYLINE: It's an environment ripe with promise for the airlines, but profits the CEOs are predicting are not guaranteed. Airlines have laid off thousands of people during the pandemic and, while they have been hiring like mad to try and get ready for this summer, in a lot of cases they're not even close to where they need to be.

PADDY HIRSCH, BYLINE: Yeah, federal data from February found that airline staffing was down 2% from the same month in 2020. Now, 2% may not sound like much, but if demand's going to be the highest it's been in 30 years, as the CEO of United Airlines recently predicted it could be, then airlines are going to have to hurry up with the hiring if they want to reap the benefits. That means more flight attendants, more ground crew, more mechanics, all of whom have to be hired in one of the tightest labor markets in decades.

MA: And maybe the biggest challenge is happening in the nose of the aircraft. Pilots are in really short supply. Casey Murray is an airline captain with Southwest, and he's also president of the Southwest Airlines Pilots Association union. This shortage has been on his radar for years, and Casey says the pandemic just made a bad situation worse.

CASEY MURRAY: All the airlines shed, through various voluntary programs, early retirements, and so now that we're back on the other side of it and the industry is recovering, it's really exacerbated and accelerated that shortage of pilots.

MA: Some airlines like Delta and Alaska - they're trying to be proactive, so they're creating their own training programs, and that way they can have their own pipeline. But Casey says all that's done is create another shortage.

MURRAY: Southwest is having problems putting people through the pipeline right now due to some issues with even hiring instructors to train.

HIRSCH: And all of this is a problem for airlines. I mean, if they don't have the pilots, they can't fly the planes. If they can't fly the planes, they can't sell the seats.

MA: And the airlines appear to be dealing with this problem in a couple of ways. First, they're squeezing their pilots, pushing them to pull more shifts and work longer hours. And pilots are obviously not happy about this. Alaska Airlines pilots are picketing. At Southwest, Casey Murray says his union just wrote the airline to say they want some systemic changes to be made to avoid pilot fatigue.

HIRSCH: Pilot fatigue? I don't want a fatigued pilot flying my plane - or a grumpy one, for that matter. Hayley Berg is an economist at the travel app Hopper. She says there's - a second way airlines are reacting to this pilot shortage is by taking a highly flexible approach to the market, reducing traffic on some routes and maybe even dropping routes altogether.

HAYLEY BERG: They're going to be figuring out, dynamically, where is there the most demand? Where should we be offering a few services a day versus maybe just one service a day? Where do we need a large wide-body plane versus where can we just service with a smaller plane?

HIRSCH: There's a lot at stake for the airlines here. If things go wrong - another COVID spike or a massive increase in fuel prices - demand could evaporate and put the airlines right back on life support. But if things go well this summer, it could put the airlines back in the black. So they're going to be praying for clear skies and a strong tailwind.

MA: Adrian Ma.

HIRSCH: Paddy Hirsch, NPR News.

(SOUNDBITE OF MOKHOV'S "SPRING EVENING") Transcript provided by NPR, Copyright NPR.

Paddy Hirsch
Adrian Ma
Adrian Ma covers work, money and other "business-ish" for NPR's daily economics podcast The Indicator from Planet Money.