Airlines to report earnings amid government shutdown and fuel concerns

The partial government shutdown that began Dec. 22 became the longest on record over the weekend. The impact is already visible in aviation. The impasse over funding for a wall along the U.S. southern border has furloughed FAA inspectors, holding up federal approval of new routes and planes. Shortages of Transportation Security Administration officers, who are not receiving regular paychecks, have been calling in sick in greater numbers, prompting at least two major airports — Miami International Airport and Houston’s George Bush Intercontinental Airport — to close some checkpoints.

The shutdown has raised questions about air carriers’ ability to follow through with scheduled events like aircraft and route launches.

Delta Air Lines scheduled a launch Jan. 31 of its brand-new Airbus A220s, a plane it’s using to court business travelers with bigger seats and windows. Also, Southwest Airlines is awaiting government approval to begin service to Hawaii.

Airlines need Federal Aviation Administration inspectors’ approval to debut new aircraft. The FAA over the weekend said it called about 500 furloughed safety inspectors back to work. FAA safety inspectors oversee and approve new aircraft, airplane maintenance and personnel like pilots and mechanics, among other areas.

“This is likely to get worse before it gets better,” wrote Helane Becker, airline analyst at Cowen & Co. “We are aware that airports are working with the airlines, the TSA and the FAA to keep the U.S. airspace open for business, but the longer this goes on, the more concerning it becomes.”

The shutdown may even hurt demand with government employees not receiving a paycheck, said Jamie Baker, airline analyst at J.P. Morgan Chase.

“Even with an imminent reopening of the government, if one has maxed out their credit cards putting food on the table, the probability of a now planning a summer vacation seems low.”

Be the first to comment

Leave a Reply

Your email address will not be published.


*