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Home Investing News

Europe’s summer of discontent reveals travel sector labor crisis

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June 20, 2022
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Europe’s summer of discontent reveals travel sector labor crisis
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An Airbus A330neo aircraft performs at the 53rd International Paris Air Show at Le Bourget Airport near Paris, France, June 17, 2019. — REUTERS/BENOIT TESSIER/

AMSTERDAM/PARIS/DOHA — After 21 years as a service agent at Air France, Karim Djeffal left his job during the COVID-19 pandemic to start his own job-coaching consultancy.

“If this doesn’t work out, I won’t be going back to the aviation sector,” says the 41-year-old bluntly. “Some shifts started at 4 a.m. and others ended at midnight. It could be exhausting.”

Mr. Djeffal offers a taste of what airports and airlines across Europe are up against as they race to hire thousands to cope with resurgent demand, dubbed “revenge travel” as people seek to make up for vacations lost during the pandemic.

Airports in Germany, France, Spain and the Netherlands have tried offering perks including pay rises and bonuses for workers who refer a friend.

Leading operators have already flagged thousands of openings across Europe. But the industry says European aviation as a whole has lost 600,000 jobs since the start of the pandemic.

Yet the hiring blitz can’t come fast enough to erase the risk of canceled flights and long waits for travellers even beyond the summer peak, analysts and industry officials say.

The summer when air travel was supposed to return to normal after a two-year pandemic vacuum is in danger of becoming the summer when the high-volume, low-cost air travel model broke down — at least in Europe’s sprawling integrated market.

Labor shortages and strikes have already caused disruption in London, Amsterdam, Paris, Rome and Frankfurt this spring.

Airlines such as low-cost giant easyJet are cancelling hundreds of summer flights and new strikes are brewing in Belgium, Spain, France and Scandinavia.

As industry leaders head to a summit in Qatar this week, a major theme will be who bears responsibility for the chaos between airlines, airports and governments.

“There is a lot of mud-slinging but every side is at fault in not coping with the resurgence of demand,” said James Halstead, managing partner at consultancy Aviation Strategy.

The aviation industry says it has lost 2.3 million jobs globally during the pandemic, with ground-handling and security hardest hit, according to Air Transport Action Group which represents the industry.

Many workers are slow to return, lured by the ‘gig’ economy or opting to retire early.

“They clearly have alternatives now and can switch jobs,” said senior ING economist Rico Luman.

While he expects travel pressure will ease after the summer, he says shortages may persist as older workers stay away and critically, there are fewer younger workers willing to replace them.

“Even if there is a recession, the labor market will remain tight at least this year,” he said.

LOW MORALEA major factor slowing hiring is the time it takes new workers to get security clearance, in France up to five months for the most sensitive jobs, according to the CFDT union.

Marie Marivel, 56, works as a security operator screening luggage at CDG for around 1,800 euros a month post-tax.

She says shortages have led to staff being overworked. Stranded passengers have been turning aggressive. Morale is low.

“We have young people who come and leave again after a day,” she says. “They tell us we’re earning cashiers’ wages for a job with so much responsibility.”

After much disruption in May, the situation in France is stabilizing, said Anne Rigail, chief executive of the French arm of Air France-KLM.

Even so, Paris’ Charles de Gaulle and Orly airports, where one union has called a strike on July 2, still need to fill a total of 4,000 vacancies, according to the operator.

And in the Netherlands, where unemployment is much lower at 3.3%, unfilled vacancies are at record highs and KLM’s Schiphol hub has seen hundreds of canceled flights and long queues.

Schiphol has now given a summer bonus of 5.25 euros per hour to 15,000 workers in security, baggage handling, transportation and cleaning — a 50% increase for those on minimum wage.

“That’s of course huge, but it still isn’t enough,” said Joost van Doesburg of union FNV.

“Let’s be honest, the last six weeks have not really been an advertisement for coming to work at the airport.”

Schiphol and London’s Gatwick last week unveiled plans to cap capacity during the summer, forcing more cancellations as airlines, airports and politicians bicker over the crisis.

Luis Felipe de Oliveira, head of global airports association ACI, told Reuters airports are being unfairly blamed and airlines should work harder to address queues and rising costs.

Willie Walsh, head of the International Air Transport Association, the global airline industry group meeting in Qatar, has dismissed talk of a breakdown in air travel as “hysteria”.

Walsh in turn blames part of the disruption on the actions of “idiot politicians” in places like Britain where frequent changes in COVID policy discouraged hiring.

The IATA meeting is expected to signal relative optimism about growth tempered by concerns over inflation.

Such gatherings have for years portrayed industry as the positive face of globalization, connecting people and goods at ever more competitive fares.

But the European labor crisis has exposed its vulnerability to a fragile labor force, with the resulting rise in costs likely to push fares higher and add pressure for restructuring.

In Germany, for example, employers say many ground workers have joined online retailers such as Amazon.

“It’s more comfortable packing a hair dryer or a computer in a box than heaving a 50-pound suitcase crawling into the fuselage of an airplane”, said Thomas Richter, chief of the German ground-handling employers’ association ABL.

Analysts say the labor squeeze may raise costs beyond the summer but it is too early to tell whether the industry must step back from the pre-pandemic model of ever-rising volumes and cost-cutting, which generated new routes and kept fares low. — Reuters

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