Airlines Face Thanksgiving Turbulence as Shutdown Threat Looms
Carriers brace for potential disruptions as air traffic controllers and TSA staff could work without pay during one of the year's busiest travel periods.
Shares of major U.S. airlines declined in recent trading as investors weighed the growing risk of a government shutdown that could trigger widespread disruptions just as carriers prepare for the critical Thanksgiving holiday travel rush.
American Airlines (AAL) saw its stock fall 2.7%, while United Airlines (UAL) and Delta Air Lines (DAL) also trended lower, shedding 0.5% and 0.8% respectively. The negative sentiment reflects mounting concern that a political impasse in Washington could force thousands of essential federal employees, including air traffic controllers and Transportation Security Administration (TSA) agents, to work without pay.
The core of the issue lies with the nearly 25,000 members of the Federal Aviation Administration's (FAA) air traffic control workforce. While deemed essential and required to report for duty, a shutdown means their paychecks would be withheld. The National Air Traffic Controllers Association (NATCA), the union representing the controllers, has warned that such a scenario creates significant distractions and stress, potentially compromising the efficiency of the national airspace. In a recent statement, NATCA called on lawmakers to avert a shutdown, stating it “weakens the entire aviation system.”
This is not uncharted territory for the airline industry. The 35-day government shutdown in 2018-2019 serves as a stark precedent for the potential chaos. During that period, an increase in unscheduled absences among controllers, widely seen as a protest against working without pay, led to significant flight delays and a temporary ground stop at New York's LaGuardia Airport. The disruption ultimately contributed to ending the political standoff.
That shutdown had a measurable financial impact. Delta Air Lines reported a revenue loss of approximately $25 million in a single month, and the Congressional Budget Office estimated the five-week ordeal erased $3 billion from the U.S. economy permanently.
Industry trade groups are sounding the alarm again. Airlines for America (A4A), which represents the largest U.S. carriers, has urged Congress to find a solution, warning that ATC staffing shortages could lead to a cascade of delays and cancellations. While stressing that safety is not at risk, the group highlighted the instability a shutdown injects into a complex national aviation network, particularly ahead of a holiday period expected to see record passenger volumes.
The timing of the current threat is particularly challenging for the sector, which is already navigating a complex operating environment marked by volatile fuel prices, high labor costs, and moderating post-pandemic travel demand.
For now, travelers are being advised to monitor flight statuses closely, but the ultimate resolution rests with lawmakers. As the funding deadline approaches, both airline investors and the flying public are watching Washington, hoping to avoid a holiday travel season defined by long lines and departure board delays.