2 major airlines cutting spring season schedules, expert says it could last longer

Two major airlines announced that they are slashing their schedules through at the spring season. Airlines received $74 billion in federal COVID taxpayer relief funds so they would not disappear. Now, they want much higher ticket prices. How much? We don't know.

Southwest Airlines is dropping 65,000 flights from its spring schedule; March through May. The airline says that the primary reasons are lack of adequate staffing and extremely high fuel prices. United Airlines also is reducing its flights, well below its 2019 pre-pandemic schedule citing fuel prices, supply chain issues, global instability and delayed deliveries of new airliners.

UC Berkeley Haas School of Business economist Severin Borenstein, whose primary specialties are energy and airlines, offered his assessment. "When the price of fuel goes up, they actually take a hit for a while and then they cut back on their schedules," he said. 

He also said, for the airlines, it is a super high stakes guessing game." What are fuel prices gonna be in the spring? What is labor supply going to be? And what is demand gonna be with the potential new [COVID] surge that's coming through Europe and may come to the United States?," said the professor.

With fewer flights and high demand, United said it expects to earn strong revenues; meaning ticket prices will go up even with higher fuel costs. And, since there are only four major "mega" airlines left in the U.S., United, Southwest, Delta and American, it's easy for them to see each other’s fares in a less competitive environment. 

"I think this will almost certainly occur on all four airlines and I think we are going to see higher prices," Borenstein said. How long will this go on? "We don't know how long this is going to last because we don't know what's going to happen with oil prices."

Houston's airports are already advising their passengers to arrive three hours early for domestic flights and four hours for international trips.