By Rajesh Kumar Singh

CHICAGO, (Reuters) – A series of flight cancellations that have been highly publicized has brought attention to worker shortages in the United States. This led to warnings about delays as companies scramble for workers.

It’s a significant shift in an industry that had been struggling with labor surpluses when coronavirus decimated air travel a year back. This latest sign of a growing labor crunch is also a remarkable one.

The airlines are having a hard time keeping up with demand as the United States booms. American Airlines (NASDAQ;) and Southwest Airlines are particularly affected by this challenge. These airlines have been active in increasing demand for seats.

American cancelled many flights this weekend due to staffing and weather conditions. The summer saw similar chaos.

Last month, Southwest suffered an operation meltdown which caused around 2,000 cancellations. It cost the company $75 million. Similar events occurred in August. Spirit Airlines (NYSE:) Inc cancels 2,800 flights

Airline companies are working hard to ensure that they don’t repeat the Thanksgiving holiday rush in November, just days before it happens again.

They are seeing a rise in holiday bookings due to declining COVID-19 numbers and increasing vaccinations. Southwest stated that December and November ticket sales last month were similar to those of 2019.

Airline demand is rising and there are fewer workers, making them more vulnerable to weather that can disrupt holiday travel. According to analysts, this could lead to more disruption in travel.

Helane Becker from Cowen and Co said, “If any weather is involved you can expect flight cancellations.”

SCRAMBLING FOR WORKERS

American stated in a memo to its staff last week that it expected to hire 4,000 employees during the current quarter. American is recalling almost 1,800 long-term flight attendants.

Southwest plans to recruit 5,000 workers by the end of this year.

A rush to find workers in tight labor markets can lead to rising costs, at a moment when high jet fuel prices squeeze profit margins.

Southwest offers referral bonuses for employees. It also raised the minimum wage from $15 to $15 per hour. However, applicants rates remain below levels before the pandemic.

Southwest’s director of talent acquisition Greg Muccio said that there is more competition than ever for talent. “Many people… want a lot more flexibility.”

To prevent any further disruptions, Southwest Airlines and Spirit both have temporarily canceled flights.

Unions blame airlines’ poor planning.

American pilot union announced last month that it would picket hubs in protest of work rotas and fatigue, according to the American Pilot Union.

Dennis Tajer of the Allied Pilots Association (which represents American’s pilots), stated, “We are very concerned that the management is stuffing the Holiday Turkey with uncertainty for this holiday travel period.”

It is not the case that all airlines face similar pressures. United Airlines and Delta Air Lines have so far managed to avoid some of the chaos.

They fly fewer flights each year than their rivals. United reached a settlement last year to retain all of its pilots in flight, but with reduced hours and lower wages.

United and Delta only restored more than 70% of the 2019 capacity during September through October. Southwest increased its capacity by more than 98%, while American flew only 80%.

According to industry experts, Delta and United were partially protected by the labor shortage because of their networks that are focused more on international markets. Demand remains low.

SHORTAGES ABOVE BAILOUTS

However, recent congestion has raised questions regarding airline decisions to reduce headcount even though they received $54 Billion in federal assistance to pay payroll costs.

Maria Cantwell, a Democrat sent July letters to six major airlines, American, Delta Southwest and JetBlue Airways (NASDAQ): to request explanations for worker shortages from billions in emergency bailouts. Cantwell stated that each airline had “poorly managed” their situation, and worse still let the taxpayers down.

Although their replies to these letters are not yet public, the airlines claim that they were able to save thousands of jobs and prevent bankruptcy, and have been able to help the recovery process from the pandemic.

According to industry experts, federal aid helped airlines retain employees. But problems began when there was no funding for the payroll program. Airlines asked employees to either take time off unpaid or to retire earlier because they didn’t have any funding information.

Cowen’s Becker said, “If they retained 100% their workers they would have needed more cash.”

As passengers returned from the dipping COVID-19, airlines resumed pilot hiring this spring.

The September employment rate in U.S. air transport was more than 12 percent below the peak pre-pandemic. However, restaurant and bar employment, also affected by the pandemic, are just 7.6% below their peak before the COVID-19 outbreak.

Executives acknowledge a coronavirus-shattered airline industry is naturally more risk-averse, leading to tentativeness by some carriers when the recovery kicked in. Southwest for instance, hasn’t moved with its recruitment plans since July.

Southwest’s Muccio stated, “We were kinda late for the game.”