US Airlines Warn: Government Shutdown to Impact Q4 Financial Results
US airlines are beginning to detail the substantial financial consequences of the 43-day federal government shutdown that stretched from October 1 into mid-November 2025, with several major carriers revising fourth-quarter earnings forecasts downward as a result of flight disruptions, scheduling instability, and traveler hesitation.
Southwest Airlines announced the most significant adjustment, cutting its full-year 2025 earnings forecast to approximately $500 million, down from a prior range of $600 million to $800 million. The carrier cited reduced traffic at several major airports stemming from the shutdown, alongside elevated fuel costs, as primary drivers of the revised outlook.
Delta Air Lines similarly warned that fourth-quarter financial results will underperform expectations. CEO Ed Bastian detailed the shutdown’s impact during investor communications, estimating the carrier absorbed roughly $200 million in costs. The financial hit resulted from a sharp increase in ticket refunds and a notable slowdown in new bookings as travelers responded to public warnings from the US Department of Transportation and FAA regarding controller staffing constraints.
The operational crisis unfolded as thousands of unpaid federal air traffic controllers called out sick or pursued temporary outside employment to compensate for missed paychecks during the extended budget impasse. Facing critical safety margins, the FAA issued emergency directives requiring airlines to cancel up to 6 percent of domestic flights initially, escalating to as high as 10 percent at 40 major airports. Between November 7 and 16 alone, more than 10,000 flights were canceled according to combined FAA and industry figures.
Major transportation hubs including New York, Chicago, Los Angeles, and Atlanta experienced extended ground delays and rolling cancellations throughout the disruption period. Airlines repeatedly adjusted schedules ahead of the critical Thanksgiving travel window, creating significant operational and customer service challenges. According to Airlines for America, the trade association representing US carriers, staffing-related delays and cancellations affected approximately 5.2 million passengers during the shutdown period.
United Airlines and American Airlines have not yet disclosed specific financial figures attributable to the shutdown, though both carriers publicly appealed to Washington to resolve the budget standoff as FAA flight capacity restrictions tightened. United reduced flights at affected airports in compliance with FAA directives, while American reported widespread delays and cancellations across its network.
Delta management reported that travel demand has since recovered, citing robust Thanksgiving and December booking patterns. However, CEO Bastian acknowledged that unprecedented public statements from federal officials about controller shortages created temporary hesitation among potential travelers, contributing to the demand disruption.
Additional carriers are expected to revise guidance in coming weeks as industry-wide financial impacts become clearer. Analysts anticipate the shutdown’s consequences will vary significantly by network structure, with airlines dependent on congested East Coast and Midwest hub operations likely experiencing the greatest financial pressure.
Source ID: SRCE-2025-1764986400000-1215