Analysis-Europe's summer of discontent reveals travel sector labour crisis

2/2 © Reuters. FILE PHOTO: Paris-Charles de Gaulle airport employees gather outside terminal 2E as they take part in a protest against low wages at the Paris-Charles de Gaulle airport in Roissy, near Paris, France, June 9, 2022. REUTERS/Benoit Tessier 2/2

By Toby Sterling, Caroline Pailliez and Tim Hepher

AMSTERDAM/PARIS/DOHA (Reuters) -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."

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.

Yet the hiring blitz can’t come fast enough to erase the risk of cancelled 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.

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

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

On Monday the British carrier said it was cutting even more services in the busy summer period to help manage problems including ground staff shortages and flight caps at London Gatwick and Amsterdam.

As industry leaders hold their annual 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.

Aviation lost 2.3 million jobs globally during the pandemic, with ground-handling and security hardest hit, according to industry lobby group the Air Transport Action Group.

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, fewer younger workers are willing to replace them.

"Even if there is a recession, the labour market will remain tight at least this year," he said.

LOW MORALE

A 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 stabilising, said Anne Rigail, chief executive of the French arm of Air France-KLM.

Even so, Paris's 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 cancelled 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.

BLAME GAME

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".

"It has been bad for some consumers, and clearly airlines and airports want to apologise for that," he told Reuters.

"But we need to put it into context; it's not at every airport...I haven't witnessed the horror stories I read about in the press," he said on the sidelines of his group's annual meeting in Doha.

Walsh has already blamed part of the disruption on the actions of "idiot politicians" in places like Britain where frequent changes in COVID policy discouraged hiring.

The June 19-21 IATA meeting signals relative optimism about growth tempered by concerns over inflation.

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

But the European labour crisis has exposed its vulnerability to a fragile labour 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 (NASDAQ:AMZN).

"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 labour 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.

For some departing employees, however, Europe's torrid summer signals a wake-up call for passengers and bosses alike.

"I personally think the very cheap flying...I just don't know how they can really keep up with that," said a former British Airways cabin crew member, 58, who has taken redundancy.