Topline
Share prices of several major U.S. airlines were down at least 1% early Thursday afternoon, one day after the Federal Aviation Administration announced flight reductions at 40 major airports amid an unprecedented government shutdown that has caused numerous flight delays, high wait times and major staffing troubles at airports nationwide.
The flight reductions were announced Wednesday and go into effect Friday. (Photo by Mario Tama/Getty Images)
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Key Facts
Alaska Airlines and Hawaiian Airlines parent company Alaska Group fell about 2.2%% in trading as of around 1:45 p.m. EST, slicing significant gains made Wednesday.
Shares of American Airlines Group were down 1.5% around the same time, also erasing gains made by the company made Wednesday.
United Airlines Holdings and Delta Air Lines were down at least 1%, and at times were down more than 2% on Thursday.
The stock turbulence follows the FAA’s decision to reduce flights starting Friday by 10% at 40 major airports, doing so as a safety precaution amid the government shutdown affecting several aspects of airport operations.
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Contra
Southwest Airlines’ stock was up a fraction of a percent Thursday afternoon, maintaining gains made Wednesday.
What To Watch For
Multiple air traffic controllers told Forbes they expect several colleagues to quit their jobs soon if they see a $0 pay statement on Friday notifying them of their second missed paycheck.
What Have Airlines Said About The Reductions?
United Airlines said in a tweet it expects “the vast majority of customers’ travel” to proceed as planned, adding it would reach out to customers impacted by schedule changes. A statement from United Airlines CEO Scott Kirby said his company will make rolling updates to its schedule so it can give customers “several days’ advance notice.” Kirby also said “any customer traveling during this period is eligible for a refund if they do not wish to fly – even if their flight isn’t impacted.” Delta Airlines provided a similar statement to United’s, saying it would give impacted customers as much notice as possible and provide “additional flexibility to all of our customers during the impacted travel period to change, cancel or refund their flights, including our basic economy fares, without penalty.”
Key Background
The looming flight reductions could affect roughly 3,500 to 4,000 flights daily, according to NBC News. FAA Administrator Bryan Bedford said Wednesday the agency is “seeing pressures build in a way that we don’t feel, if we allow it to go unchecked, will allow us to continue to tell the public that we operate the safest airline system in the world.” He also noted the FAA “can’t ignore” the government shutdown’s impact on airport staffing. Some air traffic controllers have called out of work after missing their first full paychecks on Oct. 28, with all controllers set to miss their second paycheck on Nov. 11. The shortages have also hit Transportation Security Administration (TSA) officers, who have said the agency is using “scare tactics” to stop them from calling in sick.
Further Reading
FAA Will Reduce Flights This Week Due To Shutdown—Thousands Of Flights Could Reportedly Be Impacted (Forbes)
‘Hundreds’ More Air Traffic Controllers Could Quit Starting Friday—As Major Hubs Brace For Thousands Of Cancelled Flights (Forbes)
