Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
Fans of Newark’s airport — and there are some — used to smirk at the New Yorkers who preferred the traffic-jammed crawl east to fly from JFK instead of the hop west across the Hudson river. No more, since their New Jersey hub has become a byword for delays and chaos. Newark’s biggest customer, though, is so far benefiting from consistent message delivery.
The disarray at Newark stems from the April 28 loss, for more than a minute, of communications between air traffic controllers and the planes they were guiding. Disruptions have since hit hundreds of flights. Newark is the New York area base for United Airlines, which has about three-quarters of the airport’s capacity. Last week, it cut 35 scheduled daily round trips because air traffic control (ATC) could not handle the volume.
Since the outage, however, United’s shares have risen more than 15 per cent, along with similar gains for rivals American Airlines and Delta Air Lines. That is in large part because the problem is widely understood to lie with the Federal Aviation Administration, not the airlines. On Wednesday, US transportation secretary Sean Duffy specified fixes for Newark. The following day, he presented a plan to modernise ATC and called on Congress for an unspecified amount — estimated to be in the tens of billions.
United has also been helped by boss Scott Kirby’s long-standing outspokenness on air traffic issues. In March, he outlined the fixes he felt necessary for ATC, which he blamed for two-thirds of United’s delays even on good-weather days. In 2022, he blamed it for half of United’s flight delays. Kirby’s reputation for frank talking has won him investor plaudits on other issues too: last month, he gave two estimates for 2025 earnings — recession and stable — when others refused to give any, citing economic uncertainty.
United’s shares rose 5 per cent on Thursday to trade on just over seven times expected earnings, from four times early in April — still far short of an average multiple of roughly 10 before the pandemic.
Few people with any US experience will struggle to blame its creaking infrastructure for Newark’s disorder. Even if Duffy gets his unspecified billions, it will take years to fix the system. In the meantime, US airlines will bear extra costs, from the flights they cannot operate to the extra fuel planes will need to carry to cope with longer holding patterns on busy days. United will need all the straight talking and clear communications it can get.
jennifer.hughes@ft.com
