Business
American Airlines CEO says the government shutdown is impacting holiday travel bookings: ‘Nobody wants to put up with hassle’
The longest government shutdown in U.S. history enters its 39th day on Saturday as the Senate extends negotiations into the weekend, and the peak travel season is increasingly at risk.
“Of course there’s an impact,” American Airlines CEO Robert Isom told CNBC on Friday when asked about the government shutdown hitting holiday bookings. “Nobody wants to put up with hassle. And, again, we’re doing everything we can to make sure our customers know, but as we get into the busiest travel part of the year, this is something that we just can’t let happen.”
Thanksgiving is 18 days away, with December holidays just around the corner. But the Federal Aviation Administration (FAA) just ordered airlines to reduce their air traffic as the industry becomes increasingly short-staffed.
“This is frustrating. We don’t need to be in this position. We’ve got to get the government back open so we don’t have to cancel flights,” Isom said.
American Airlines canceled more than 200 out of 6,200 scheduled flights on Friday, he added. Reductions mainly impacted smaller aircraft and came via lower frequencies of flights—like from Miami to Orlando or from Dallas-Fort Worth to Corpus Christi.
So far, American isn’t cancelling any service to smaller markets, but Isom warned that flight cancellations will rise over time.
He also noted the economic impact, given how many people work in travel-related industries. As of August, the leisure and hospitality sector employed just over 17 million people out of a total of roughly 171 million people in the U.S. labor force, according to the Bureau of Labor Statistics. This equates about one in 10 jobs.
Flights are getting canceled because of a shortage of air traffic controllers during the government shutdown, which has forced them to work without pay.
But since they still must pay bills, air traffic controllers are calling out sick to take on secondary jobs, creating a staffing crunch. Federal aviation employees are set to miss their second paycheck on Tuesday, if the government shutdown continues—which Transportation Secretary Sean Duffy said on Friday will lead to a higher staff reduction.
“Most of the controllers can navigate missing one paycheck, virtually none of them can navigate missing two paychecks,” Duffy told Fox News on Friday.
In response to staffing shortages, the FAA is incrementally reducing air traffic to 10% by next week. The agency started with a 4% reduction in the flight operations at 40 major airports on Friday, which it will ramp up to 6% by Nov. 11, 8% by Nov. 13, and up to 10% by Nov. 14.
United Airlines, Delta Air Lines, and American Airlines canceled flights totaling between 3.5% and about 4% on Friday.
On Friday, 1,000 flights were canceled, largely due to the government shutdown, and hundreds more will follow suit this weekend, according to The Associated Press.
Last year, November and December collectively had over 1.37 million domestic flights, according to the Department of Transportation.
Isom told CNBC that as flight disruptions pile up, so will complications. “Managing the industry becomes exponentially harder as you increase the level of cancellations.”
