Partial U.S. Government Shutdown Could Cost Travel Industry $1 Billion Weekly

By David Shepardson

WASHINGTON (Reuters) – A partial government shutdown could cost the U.S. travel industry $1 billion per week and cause significant disruptions for travelers, according to the U.S. Travel Association.

"A prolonged government shutdown threatens holiday travel disruptions that Americans won’t tolerate," stated CEO Geoff Freeman. On Thursday, the head of the Transportation Security Administration (TSA) warned that an extended shutdown could result in longer wait times at airports.

A letter from over two dozen aviation groups cautioned congressional leaders about the negative impacts a shutdown could have on the Federal Aviation Administration (FAA).

"The FAA, its dedicated frontline workforce, our aviation community, and our economy cannot afford a disruption, regardless of how long it lasts," the joint letter from Airlines for America, the Air Line Pilots Association, and others highlighted.

The TSA projects to screen 40 million passengers over the holidays, having already set records during Thanksgiving.

Fitch Ratings indicated that a shutdown might cause non-material operational disruptions at airports, especially as non-essential FAA and TSA workers get furloughed. Despite the potential shutdown beginning Saturday, approximately 59,000 out of 62,000 TSA employees are classified as essential and would continue to work without pay. Similarly, air traffic controllers would also be required to work unpaid.

Freeman voiced concerns about Congressional support, noting, "It’s hard to see how anyone in Congress wins if they force TSA workers, air traffic controllers, and other essential employees to work without pay during one of the busiest travel periods of the year." The travel association, which includes major players like United Airlines, Marriott, American Airlines, and Hertz, reported that 60% of Americans might consider changing their travel plans if a shutdown occurs, with many opting to cancel or avoid flights altogether.

Without a funding agreement, the FAA anticipates needing to furlough over 17,000 employees and suspend air traffic controller training. During a 35-day shutdown in 2019, absences among controllers and TSA officers increased due to unpaid work, leading to longer wait times at checkpoints and slowed air traffic in New York. This situation pressured lawmakers to resolve the impasse.