Airlines impacted by government shutdown

Airlines impacted by government shutdown

Delta Chief Executive Officer Ed Bastian said during the company’s recent investor conference call that the airline is losing $25 million in January because fewer government contractors are taking business trips, and he said that the operational issues affected, such as not being able to get the paperwork to get newly purchased planes up and running. Delta also said it may not be able to put its new A330-900neos into service because of agency furloughs.

“It’s reached a point where many things airlines rely on from their regulators they simply don’t have access to,” said former airline executive and industry analyst Robert W. Mann, such as getting approvals to start flying new planes and renew pilots’ licenses and medical clearances.

The drag on airline stocks was evident with American, United, Delta, and Southwest as big losers. United dropped 2.63%, while Southwest fell 2%. Delta fell 2.1% to 47.10, near its year low of 45.08. And American fell 3.62% to 32.74, near a 52-week low of 28.81.

Safety was another issue during the shutdown.

American Airlines said it has seen some weaker last-minute bookings but declined to provide a dollar amount.

JetBlue Airways CEO Robin Hayes said on an earnings call Thursday. “We are close to a tipping point, as many of these (federal) employees are about to miss a second paycheck.”

Southwest Airlines originally planned for the final stages of the certification process but this was not completed because of the government action pushing back the new Hawaii routes that were to have started in early 2019.

Todd Curtis, aviation safety and security analyst and founder of AirSafe.com said “ The impact on safety, or rather the risk to the passengers due to deliberate actions such as terrorism, I believe is minimal, if non-existent, because the shutting down of some of the terminals is indicative of a staffing issue, not a quality-of-staff issue.”

Safety was another issue during the shutdown. FAA attorneys were furloughed and not able to take action against any aviation company that may have created a safety concern.

Safety concerns became real when more workers were not getting to work. After weeks of the shutdown, the FAA was greatly impacted, and slowdowns at regional NY airports created a safety issue. Right after that fateful day January 25, when LaGuardia FAA was not able to handle flights did the President call for an end to the shutdown. The end to the drain on airlines fortunes due to the shutdown temporarily came to an end.

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