The most extensive government shutdown ever documented resulted in an approximate $200 million expenditure for Delta Air Lines, according to CEO Ed Bastian on Wednesday, marking the initial revelation from a U.S. Carrier concerning the shutdown’s financial impact.
TL;DR
- Delta Air Lines incurred approximately $200 million in costs due to the government shutdown.
- The 43-day shutdown caused significant flight delays and disruptions at 40 busy U.S. airports.
- Air traffic controllers worked without pay, leading to FAA mandated flight schedule reductions.
- Delta CEO Ed Bastian believes the shutdown's financial consequences are now behind the airline.
Bastian told investors that refunds “grew significantly” while bookings slowed amid the uncertainty in air travel caused by the 43-day shutdown, contributing to Delta’s loss of about 25 cents per share.
The closure, commencing on October 1st, resulted in long delays at major airports and unprecedented flight disruptions at 40 of the country’s busiest airports due to an increasing number of air traffic controllers working without pay, who reported heightened pressure and the necessity of seeking secondary employment. With the government closure extending into its second month, the Federal Aviation Administration released an emergency order mandating that commercial carriers reduce their domestic flight schedules by as much as 6% — a measure that Transportation Secretary Sean Duffy characterized as essential for ensuring the security of air transit.
“When you’ve got the secretary of transportation telling people we don’t have controllers, questioning the safety at some level of travel, which has never before happened,” Bastian said, it led to more customers holding off on booking their holiday travel.
Over 10,000 flights were cut from November 7th, when the FAA's directive became active, until November 16th, a period under two weeks prior to Thanksgiving, the most active travel season in the U.S., the restrictions were fully lifted
Despite the interruption to flights, Bastian stated on Wednesday that he feels the shutdown's consequences are behind us. He mentioned that Delta experienced a high volume of travelers during Thanksgiving week and that reservations extending to the year's conclusion, particularly for The Christmas and New Year's holidays, were “really strong.”
“I think we’re through it and it was transitory,” Bastian said of the shutdown. “We’re looking forward to a strong December, a strong close to the year.”
Airports impacted by the flight restrictions during the shutdown included large hubs in New York, Chicago, Los Angeles and Atlanta. The flight cuts started at 4% and later grew to 6% before the FAA rolled the restrictions back to 3%, citing continued improvements in air traffic controller staffing after the shutdown ended Nov. 12.
Air traffic controllers were among the government workers who had to keep working without compensation during the shutdown, not receiving two full paychecks.
President Donald Trump took to social media during the shutdown to pressure controllers to “get back to work, NOW!!!” He called for a $10,000 bonus for those who stayed on the job and suggested docking pay for those who haven’t.
One week following the conclusion of the government closure, the Federal Aviation Administration declared that a mere 776 air traffic controllers and technical staff exhibiting flawless attendance throughout the shutdown period would be granted bonuses, thereby excluding approximately 20,000 additional employees.
On Wednesday, Senator Tammy Duckworth, who holds the ranking position on the Senate Subcommittee on Aviation, Space and Innovation, dispatched a letter to Duffy, insisting that he also provide bonuses to the rest of the FAA employees.
“It is wrong to financially penalize these Federal employees for responsibly managing life events beyond their control while working without pay,” she said.
Duffy offered no immediate reply on Wednesday to the correspondence, but when questioned regarding the bonuses the previous week at a press briefing prior to the Thanksgiving travel window, Duffy stated that both he and the director of the FAA acknowledge “some of the difficult circumstances our controllers were going through” throughout the shutdown. However, Duffy asserted that a cessation of the bonuses was required.
“If you got 100% on your test, you get the sticker that’s a scratch-and-sniff sticker,” Duffy said, adding that all the controllers and technicians who were forced to work unpaid would receive full backpay.
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Associated Press writer Josh Funk contributed to this report.
