Southwest CEO Warns Partial Government Shutdown Could Break Airline Industry

The CEO of Southwest Airlines, Gary Kelly, warns Thursday the stalemate surrounding the partial government shutdown could break the airline industry.

The warning comes as Southwest reports it is already losing millions of dollars because of the showdown in Washington.

Gary Kelly didn’t mince words in an exclusive interview with CNBC and slammed inaction by politicians in Washington.

“It is a crazy way to run our country. Absolutely absurd,” he said.

NBC 5 News
Southwest Airlines CEO Gary Kelly, on CNBC, talks about the impact the federal government shutdown is having on the airline industry, Thursday, Jan. 24, 2019. See the interview here.

The Dallas-based airline lost an estimated $10 million to $15 million in the final quarter.

The figure is higher than Wall Street’s expectations.

Southwest is projecting strong returns for 2019, but if the shutdown carries on the outlook could change.

“The shutdown is painful. It’s certainly painful for the people who are furloughed,” said Kelly. “It is very frustrating. In our business at least we deal with the federal government in a very intimate way. The TSA screens every passenger, the FAA manages every flight.”

Those agencies are obviously impacted by the shutdown.

Southwest also remains unable to expand its service to Hawaii while FAA employees who would oversee the operation are furloughed.

The other major North Texas airline, Fort Worth-based American Airlines, also reported its fourth quarter profits today saying it earned $319 million.

That figure is slightly higher than expected.

American said there is too much uncertainty to give an exact number on how much it has lost due to the shutdown but will evaluate the impact once the shutdown is over.

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