US government shutdown could cost travel sector $1 billion per week, disrupt holiday travel

By David Shepardson

WASHINGTON (Reuters) – A partial government shutdown could cost the U.S. travel industry $1 billion per week and lead to widespread disruptions for travelers, a trade group representing airlines, hotels and other travel companies said on Friday.

“A prolonged government shutdown threatens holiday travel disruptions that Americans won’t tolerate,” said U.S. Travel Association CEO Geoff Freeman. On Thursday, the head of the Transportation Security Administration warned an extended partial U.S. government shutdown could lead to longer wait times at airports.

A letter from more than two dozen aviation groups on Friday warned congressional leaders that a shutdown could have dire impacts on the Federal Aviation Administration.

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

TSA expects to screen a record 40 million passengers over the holidays after setting records over the Thanksgiving holiday.

Fitch Ratings said a shutdown “could also cause non-material operational disruptions at airports with non-essential FAA and TSA worker furloughed.”

TSA, which handles airport security screening, said about 59,000 of its 62,000 employees are considered essential and would continue working without pay in the event of a shutdown that would begin on Saturday unless the government reaches a funding deal.

Air traffic controllers and TSA officers are among the government workers who would be required to keep working but would not be paid.

“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,” said Freeman of the travel association whose members include United Airlines, Marriott, American Airlines (NASDAQ:AAL) and Hertz

The group said a survey found 60% of Americans would consider altering travel plans if a government shutdown occurs, with many choosing to cancel or avoid flights altogether.

Without a deal, the FAA estimated it would have to furlough more than 17,000 employees and halt training of air traffic controllers.

In 2019, during a 35-day shutdown, the number of absences by controllers and TSA officers rose as workers missed paychecks, extending checkpoint wait times at some airports. The FAA was forced to slow air traffic in New York, putting pressure on lawmakers to finally end the standoff.