Economy & Trade

Airline industry fears bite from shutdown

U.S. airlines are warning Washington that a prolonged shutdown could do serious damage to the industry, with fewer government workers to keep flights safe and timely.

American carriers have staged a remarkable turnaround in recent years, posting profits and improving management after years of financial stress. The strong economy and steady employment have helped more Americans fly and splurge on vacations.

But as the shutdown drags out, the aviation industry is facing unique challenges and urging President Trump and lawmakers to quickly reopen the government.

“Some carriers are feeling the effects of the government shutdown,” said Airlines for America, a trade group representing nine major U.S. carriers, in a statement.

“We urge elected leaders to resolve or address these impacts quickly to ensure that travelers can continue flying, cargo can be delivered on time, the American economy can keep growing and our skies remain safe,” the group added.

The shutdown, which began Dec. 22, is now in its fourth week. Commercial flight activity tends to be relatively slow at the start of the year as Americans settle in at home after holiday travel. But the effects of an extended shutdown come amid a disappointing earnings season for major U.S. airlines and could weigh heavily on the industry’s plans to grow for months to come.

Helane Becker, airline analyst at Cowen, said the shutdown could potentially stifle summer air travel, slow the airline sector’s growth and hinder industries and workers dependent on a vacationing public.

“There are numerous impacts, and none of them are very good,” Becker told The Hill. “It goes beyond government employees and contractors.”

Aviation is one of the sectors where the impact of the shutdown is most visible to the American public.

Federal workers, including air traffic controllers and Transportation Security Administration (TSA) agents, are working without pay. Some airports across the U.S. have reportedly seen flyers wading through slow-moving security lines as unpaid TSA employees call out of work.

TSA spokesman Michael Biello said the agency was dealing with an unscheduled absence rate of 7.6 percent on Monday, more than double the 3.2 percent rate from one year ago, as more workers call out sick. He insisted that airport “security standards remain uncompromised.”

But absenteeism has forced some airports to temporarily close or scale back flights at some terminals to deal with a shortage of security officers, including at major hubs such as Miami International, Atlanta’s Hartsfield-Jackson, Houston’s George Bush Intercontinental, and in Washington, Dulles International Airport.

Compounding those problems, outside of public view, many Federal Aviation Administration (FAA) officials have also been furloughed. Those furloughs have delayed plans for airlines to get new air routes and aircraft approved, the issuing of new licenses to pilots and delayed approval for plans to expand U.S. airport facilities, according to a letter from the industry to President Trump, Speaker Nancy Pelosi (D-Calif.) and Senate Majority Leader Mitch McConnell (R-Ky.).

The short-staffed FAA has shuttered a training facility in Oklahoma City for air traffic controllers.

The National Air Traffic Controllers Association (NATCA) sued the Trump administration on Friday for forcing its members to keep working without pay, claiming the government “unlawfully deprived NATCA members of their earned wages without due process.”

There is no end in sight for the shutdown, with Trump and Democratic lawmakers deadlocked on a resolution.

The shutdown also comes at a critical time for the industry.

The industry letter noted that “civil aviation supports more than 7 percent of the U.S. gross domestic product (GDP) and $1.5 trillion of economic impact, creating over 11.5 million jobs.”

Airlines are on track to report their eighth-consecutive year of profits, according to Becker, but those numbers are still falling short of analyst expectations. Stocks for the commercial air sector slid last week after American Airlines and Delta Air Lines reeled back their earnings forecasts.

Analysts have attributed the shortfalls to volatile fuel prices and industrywide competition to expand flight capacity. Those risks could be exacerbated by turmoil at U.S. airports, Becker warned.

“If this goes on for a long time, they will start to leave, and won’t be replaced,” Becker said of the federal workers needed to ensure a safe flying experience.

“The airlines cannot do the security,” he added. “That is the government’s responsibility.”

The shutdown, though, has united different factions in the commercial air industry, with unions and groups representing pilots, flight attendants, safety workers, as well as the nation’s carriers, airports and travel industry.

More than two dozen of those worker unions and industry trade groups joined the Thursday letter to Trump and congressional leaders, citing the safety risks the shutdown poses to pilots, crew and passengers, and urging them to end the standoff.

The letter warned that the shutdown’s effects would only multiply.

“This partial shutdown has already inflicted real damage to our nation’s aviation system and the impacts will only worsen over time,” the groups wrote. “We urge you to act quickly to resolve these issues.”


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