The Government Shutdown Is Kicking Airlines When They’re Down and Passengers Will Feel the Pain

The government shutdown is causing plenty of problems. The one that is worrying us at this hour is the chill it’s putting on the airline industry at a time when revenue was already cooling.So far during this budget crisis, we’ve seen news stories about the devastating impact on the personal finances of federal employees and those who need government assistance. We’ve also seen the problems it is creating in national parks and in government services like food stamps. As the shutdown lingers, it will touch all of us in some way, as corporations must wait on government agencies to do their work, and consumers forego some basic government protections. Ahead of the shutdown, airlines were heading into the sweet spot of the industry’s normal economic cycle, that point where carriers add too many flights and passengers delight in a bonanza of travel discounts. Dallas to Tulsa for $76, what a country!And more capacity was in the works, with Southwest Airlines on the cusp of an industry-shaking plan to fly to Hawaii. The Dallas airline still needs certification from the Federal Aviation Administration to operate extended flights over water, a big step for the airline, which was largely constrained to land by the type of airplane it flies, the Boeing 737. But a new 737 model allows Southwest to breach this barrier. Of course, new airplanes and new routes need inspection by the FAA. Too bad President Donald Trump’s shutdown has halted these plans.Delta Air Lines also cannot add new A220 planes to its fleet as planned until FAA inspectors return to work. The airline further warned investors that the shutdown will reduce business travel, and the airline expects revenue to drop by $25 million this quarter as a result.Shares of several U.S. airlines have dropped this week, as investors anticipate more bad news. Around 10,000 U.S. Air traffic control employees are working without pay. The Canadian Air Traffic Control Association members sent pizza to control towers in the U.S. (Really.) Transportation Security Agents are working without pay; or, as the case may be, calling in sick without pay. Some airports are closing some security lines. The effect will ripple throughout the land if long lines cause flight delays, possibly even affecting airports where TSA agents soldier on. And let us hope that withholding pay from TSA agents only affects airline economics and passenger stress; the consequences of reducing aviation security could be deadly. The irony, of course, is that the shutdown, prompted by political fights over immigration and border security, could reduce security at the airports, where most immigrants enter this country.All of this amounts to economic contraction that we hope is temporary. Put us in the category of fierce free-marketeers who are generally skeptical of regulation and government intervention. But here we see what happens when government shrinks suddenly and indiscriminately. A well-regulated industry is safe, reliable and prosperous. Aviation regulation is a vital government function, for safety and for economic health.What's your view?Got an opinion about this issue? Send a letter to the editor, and you just might get published.  Continue reading...

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