CAPA's 'strike' articles count rises, but aviation labour remains cautious
The number of news articles on the CAPA - Centre for Aviation website mentioning the word 'strike' rose sharply in 1H2024.
Historically, the number of 'strike' articles broadly follows the rise and fall of airline profit margins. It is a signal of labour's confidence in claiming a greater share of aviation's profits.
Typically, the count is highest in July and remains high in August and September, coinciding with the northern summer, when demand for air travel - and global airline profits - hit a seasonal peak. The next three months will go a long way to determining the 2024 annual total, but an increase on 2023 looks very likely, and IATA is also forecasting a modest increase in airline profits this year.
However, the number of strike-related articles is not back to pre-pandemic levels for years with similar margins.
Aviation labour has regained some confidence - albeit a more cautious confidence than in the past.
- After new lows during the COVID-19 pandemic, the number of strike-related CAPA - Centre for Aviation articles rose in 2022, but it slipped back a little in 2023. In 1H2024 there was a sharp rise.
- There is a seasonal pattern in the number of articles, usually peaking in July, August and September.
- The annual number of 'strike' articles varies with the airline profit cycle.
- In 2024 a small margin improvement is forecast. An increase in strike articles also seems probable, but not yet to pre-pandemic levels.
The number of strike-related CAPA articles fell to new lows during the COVID-19 pandemic
In 2016 there were 1,228 articles on CAPA - Centre for Aviation's website that mentioned the word 'strike'. This was the highest number in the period 2009 to 2024, during which this statistic has been monitored.
The number then fell steadily to just under half of this by 2019, when it was 616, the lowest number since 2009's 381.
The COVID-19 crisis coincided with a significant drop in the number of articles mentioning 'strike'.
There were just 95 in 2020 and 97 in 2021 - by far the two lowest numbers since CAPA - Centre for Aviation started recording the annual number.
This is not surprising, given that the industry had very low levels of activity during the pandemic.
Numbers rose in 2022, but slipped back a little in 2023
The number rose by 189% year-on-year in 2022, to reach 280, although this was still low by pre-pandemic standards.
The number of articles mentioning strikes then dropped to 248 in 2023, in spite of a significant increase in industry activity.
This was only 40% of the number recorded in 2019, even though global passenger numbers were almost level with 2019.
Number of CAPA - Centre for Aviation articles mentioning the word 'strike' 2009 to 2022, and for 1H2023 and 1H2024
There was a sharp increase in strike-related articles in 1H2024
In 1H2024 the number increased sharply - by 84% year-on-year - to reach 206. This was the highest number for the first half of the year since 1H2019, but still well below the 316 articles of that period.
Every month of 1H2024 has experienced an increase, with the exception of Jun-2024, when the number was 22, versus 23 in Jun-2023.
Labour disputes within the Lufthansa Group, particularly in 1Q2024, were a significant factor in the increase in 1H2024.
Number of CAPA - Centre for Aviation articles mentioning the word 'strike', monthly 2018 to Jun-2024
July, August and September usually have the highest number of articles
The distribution of strike-related articles through the year displays a seasonal pattern.
Based on the seven-year period starting in 2H2019 and ending in 1H2024, July and August are the two busiest months for such articles. They both account for approximately 12% of the annual total, on average, while September accounts for 10%.
This seasonality is skewed towards the peak months of the northern summer, when many of the world's biggest airlines are busiest and making most of their money.
Overall, 1H has accounted for 44% of the articles, with 2H accounting for 56% (thanks to the dominance of 3Q).
Number of CAPA - Centre for Aviation articles mentioning the word 'strike', average distribution by month*
The annual number of 'strike' articles varies with the airline profit cycle
The number of CAPA - Centre for Aviation articles mentioning the word 'strike' and the annual operating profit margin of the global airline industry have been tracked since 2009.
Throughout this period, there has been a broad correlation between these two variables.
This intuitively seems to make sense.
Labour typically becomes more demanding of an increased share of the rewards when the profit cycle nears the top.
By contrast, when the airline industry is more economically challenged, labour groups' bargaining power is reduced and hanging onto jobs becomes their sole focus. This makes talk of strikes extremely rare when airline are at the bottom of the profit cycle.
The previous low point in the annual count of strike-related articles was in 2009, during the global financial crisis, when the airline industry operating margin was only 0.4%.
In 2020 the new record low of just 95 strike-related articles coincided with a record negative operating margin of -28.8% for the world airline industry.
The operating margin improved to -8.9% in 2021, but this was still significantly below any previous cyclical trough, and the number of articles mentioning strikes remained very low.
In 2022 the margin picked up to 1.5% and the number of articles also rose significantly, to 280.
However, the rise in margin in 2023 - to 5.7% - was accompanied by a small decline in the number of strike-related articles.
Perhaps the COVID-19 pandemic and its initial aftermath loosened the link between margins and strikes.
However, the increase in strike-related articles in 1H2024 suggests that labour is resuming the relationship and industrial relations are returning closer to where they might have been if the pandemic had not happened.
2024: a small forecast margin improvement - and a rise in strike articles?
IATA forecasts a small improvement in the world airline operating margin in 2024f to 6.0% (from 5.7% in 2023).
It is extremely difficult to forecast the number of strike-related articles. The evidence of previous years suggests that the figure might also be expected to increase in 2024. This certainly occurred in 1H2024.
At this stage of the year, the total for 2024 seems extremely unlikely to return to the 10-year annual average of 905 in the period 2010 to 2019, or even to 2019's level of 616.
However, the seasonality pattern may give some indications. If the distribution of articles in 2024 repeats the average of previous years, then 2H2024 might be expected to account for 56% of articles.
After 206 in 1H2024, this would mean 262 articles in 2H2024, giving an annual total of 468 this year.
That would be the highest total since 2019, but still considerably below the 616 articles in that year, in spite of the forecast margin this year being higher than in 2019.
This is not a forecast, but the chart below takes this number of 468 as an illustrative projection for 2024.
Number of CAPA - Centre for Aviation articles mentioning the word 'strike' (left hand axis) and world airline operating margin (percentage, right hand axis), 2009 to 2024e*
Strike-related articles cover a range of geographies and sectors of aviation
CAPA - Centre for Aviation news articles including the word 'strike' in 1H2024 covered a wide range of geographies and different parts of the aviation supply chain.
Airlines are a significant source of these articles, particularly flight attendants and pilots, but also represented are air traffic control, ground handling, car parking, and airports.
Companies mentioned in articles over the past two months include Lufthansa Group airlines, Aer Lingus, WestJet, Air Transat, American Airlines, Aeromexico, Aerolineas Argentinas, London Heathrow Airport, Avinor, Norwegian, French air traffic controllers, and UK Border Force staff.
These articles include situations where strikes have been averted, resolved or are only a future possibility, in addition to strikes that are under way.
Labour has regained some confidence, but remains more cautious than in the past
Strike related activity - and the number of articles reporting it - was subdued in Jun-2024, after a strong increase across much of 1H2024.
Nevertheless, an increase on the 2023 annual total seems likely for 2024. The period between July and September will be the key to the extent of the increase if previous seasonal patterns hold.
Labour has regained some confidence since the pandemic. However, industrial disputes have not returned to pre-pandemic levels, in spite of forecast margins above 2019 levels.
As suggested by CAPA - Centre for Aviation in its previous analysis of the number of strike-related articles in Aug-2023, labour still appears to be more cautious than at similar points in the profit cycle in the past.