Travel hits its peak when everyone is trying to get out of town.

Here’s the thing: just in time for American travelers to get one financial break after a year of rising prices, airports around the world are flexing under the pressure. Everyone is trying to get out of the city, often for their first real vacation in two years, but airports around the world don’t have enough staff to deal with the hype.

“Over the past few weeks, with departing passengers regularly exceeding 100,000 per day, we have begun to see periods where service drops to unacceptable levels,” Heathrow CEO John Holland-Kay said in an open letter to passengers.

No more than 100,000 departing passengers per day will be allowed to fly from Heathrow until mid-September, he said. This is slightly less than the estimated 104,000 people per day that the airport could handle this summer.

Airlines, coping with a shortage of staff, have already reduced their summer schedules.

For example, British Airways has cut about 30,000 flights, not counting last-minute cancellations, since the start of the season. according to the Wall Street Journal.

But Holland Kay said Heathrow’s latest forecast showed that an excess number of seats had already been sold, so airlines needed to stop selling tickets immediately.

THE BIG PICTURE

Our collective appetite for a good vacation has returned much faster than airports and airlines have been able to re-hire the employees they laid off in the spring of 2020. You can blame airlines or onerous regulations, depending on your point of view.

At the best of times, hiring airport workers can be a lengthy process involving background checks and security clearances. British Airways told lawmakers in June that about 3,000 potential recruits were stuck in background checks that take up to four months. Other airline executives involved in the hearing were quick to blame onerous regulations for the chaos at airports.

And rightfully so – customers want to know that their movers and ground staff have been thoroughly vetted, but in a busy job market like this, it’s even harder to recruit for these positions.

Heathrow “clearly got it wrong,” said Willie Walsh, CEO of the International Air Transport Association, a group that represents global airlines. “Telling airlines to stop selling is ridiculous for an airport to tell airlines.”

But the airlines are also to blame. US carriers have laid off tens of thousands of workers through buyouts during the pandemic despite receiving billions of dollars in payroll assistance courtesy of the US taxpayer. Now they are reselling flights that air traffic controllers can’t handle, taking advantage of sky-high fuel prices and high demand for higher prices.

Bottom line: get ready for the chaos of summer travel. And possibly fall too. If you’re the type of person who flies anywhere on Thanksgiving, also known as the busiest tourist day of the year, also known as the worst time to check out the overburdened infrastructure of the American aviation industry… woof, good luck.

DAY NUMBER: 16

Starbucks plans to close 16 locations across the US, citing employee complaints about security issues. The closure will affect stores in Seattle, Los Angeles, Philadelphia, DC, and Portland, Oregon.

The moves are part of a broader effort to rejuvenate the company, according to a letter Monday from CEO Howard Schultz, who took office for the third time this spring. He wrote that Starbucks must “dramatically” improve the working conditions of employees, adding that the company will strive to create “safety, hospitality and kindness for our stores.”

To be clear, Schultz is also trying to instill a decidedly anti-union spirit among the rank and file at Starbucks—in which he has had limited success so far.

REAR PEDAL

More than two years after the pandemic began, many of the businesses that profited the most from its turmoil are facing retribution. Ironically, investors are retreating into their bunkers, avoiding risky behavior, while consumers are emerging from their hiding places, ready to go bust, even though the virus remains a threat.

This is bad news for companies that have built their brands on the shaky ground left by the Covid-19 earthquake.

Few companies have been as closely linked to the pandemic as Peloton, whose expensive exercise bikes have sparked something of a movement around the idea of ​​staying put. For those who could afford internet-connected bikes (and treadmills, but mostly bikes), they offered a community portal outside of their own quarantine pod. There was blaring music and a dark room full of sweaty strangers – if you squint, it might have looked like a party from Before Time.

Unfortunately, Peloton couldn’t handle the heat.

Here’s the thing: Due to the latest signs of trouble at the home fitness company, Peloton has decided to stop making its own bikes and treadmills in favor of a third-party Taiwanese manufacturer, according to my colleague Jordan Walinsky. This is a radical change for the company as it struggles to cut costs.

Peloton will close its factories, which are operated by Tonic Fitness Technology, a company it bought in 2019. Around 600 Tonic employees will be laid off, according to Bloomberg.

Why is it important:

  • Peloton has spent hundreds of millions to secure US production, believing demand will remain strong. He also hoped to avoid the ocean-bound supply chain bottlenecks that have plagued global trade since 2020.
  • But the company misjudged society’s desire to train forever alone in front of a screen. Subscription sales have ground to a halt as people have returned to gyms.
  • After Peloton struggled to meet orders on time during its pandemic peak, Peloton now has too much inventory.
  • It’s the first major cost-cutting move by CEO Barry McCarthy, who was appointed in February as part of a reshuffle that included laying off nearly 3,000 employees.

On Tuesday, Peloton shares rose 3.5% on the news. But its shares are still down nearly 95% from their all-time high of late 2020.

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