An already hectic summer air travel season is about to get much more frustrating.
Just eight weeks ago, United Airlines was feeling a lot better about the summer travel season, so the company said that it would kick off the largest transatlantic expansion in its history.
The airline planned to add or resume 30 flights over the next two months, growing its capacity in the market by 25% compared to 2019.
The majority of that expansion was supposed to happen at Newark Liberty International Airport, the airline's primary transatlantic hub and its biggest hub in the New York City area.
By the end of the expansion, United expected to have 421 daily departures from Newark, up from 405 daily departures in June 2019.
However, the best laid plans by any company are subject to the market conditions, and the U.S. economy isn't in the same optimistic place it was just a couple of months ago.
This new reality led to a letter to staff announcing that United is cancelling roughly 50 daily flights at Newark through the end of the summer to "help minimize excessive delays and improve on-time performance."
Industry Turbulence In a Return to Normal
It has been a bumpy ride for airlines as the industry attempts to get back into a pre-pandemic swing following more than two years of decreased travel.
In April, American Airlines (AAL), Delta Air Lines (DAL), and Alaska Airlines (ALKHF) all posted record first quarter revenue.
United saw its revenue jump 135% year over year to $7.57 billion. While the company still lost $1.36 billion in the quarter, its operating loss more than halved year over year.
Following the quarter, United forecast a profit in 2022 and its highest second quarter earnings of record on the back of a resurgence in travel demand.
When asked whether its Newark pullback will affect this forecast, a United spokesperson pointed TheStreet to interviews CEO Scott Kirby held with CNN and Bloomberg Thursday.
While Kirby didn't provide much color about the company's own outlook, he seemed pretty honest about the issues affecting the airline industry this summer.
Capacity Is Causing Issues
Kirby indirectly did give an update on the company's previous expansion plans, saying that its capacity is still 13% smaller than it was in 2019 despite increasing demand.
"We do not have any staffing issues at United. To your point, there are a lot of infrastructures, air traffic control being the biggest, that are causing real challenges for us and for others in the industry," Kirby told Bloomberg.
"So, in the U.S. industry the biggest bottleneck is probably air traffic control. They are doing everything they can but like many in the economy they're understaffed, staffing issues, like a lot."
At Newark, Kirby says the airline has had weekends recently where air traffic controllers are less than 50% staffed.
The company says Newark presents unique challenges due to its busy schedule as the the east coast hub for flights coming from Europe. Kirby listed New York, Newark, and Florida as the hubs with the most issues right now.
According to flight-tracking site FlightAware, more than 30% of flights at Newark were delayed from the start of the year through mid-June. That places Newark behind only Chicago Midway for the most delays.
United does not have any current plans to limit flights at any of its six other U.S. hub airports.
Kirby also blamed rising prices on fuel cost inflation.
The FAA approved United's Newark plan Thursday, blaming flight cancellations on airport construction, not air traffic controller staffing issues like Kirby said.
Delta, JetBlue (JBLU), Spirit Airlines (SAVE), Southwest Airlines (LUV), and Alaska have all reduced their schedules for their own reasons this year.
