Jet Fuel Shock and Shutdown Security Lines: Airlines Brace for a Volatile Spring

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Jay Shabat is joined by Meghna Maharishi and Skift's Head of Research Seth Borko for a crossover Airline Weekly Lounge that hits two pressure points at once: a sudden jet fuel spike and the growing airport disruptions from the current U.S. government shutdown.

First, Seth breaks down what the fuel surge could mean for U.S. carriers, using airline SEC disclosures to translate price moves into real dollars, and why the pain can vary by region even when the shock is global.

Then Meghna walks through what travelers are feeling on the ground as TSA agents miss paychecks, security lines balloon at several airports during spring break, and Global Entry remains suspended, creating additional bottlenecks for international arrivals. The team closes with what to watch next, including signals expected from airline leaders at the upcoming JPMorgan Industrials conference.

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Transcript of This Conversation

This transcript is generated by artificial intelligence.

Hi everyone, thanks for joining us. This is the Airline Weekly Lounge, and today I'm joined by two of my colleagues, Meghna Maharishi, along with the head of Skift Research, Seth Borko.

We'll talk first about the impact of spiking fuel costs, and then Meghna and I will talk about the government shutdown that's currently affecting US airports. Hi Meghna, hi Seth, how are you?

Happy to be here. Super busy week, a lot of news going on in the airline world.

Yeah, thanks for having me. I'm excited for this crossover episode. We had Gordon on the other podcast, and now I get to be here my first time in the lounge.

So I'm excited to be here.

Yes, and for good reason. We'll talk about your analysis on fuel prices and how it's impacting the industry.

Very thorough and detailed analysis that Seth did, and I immediately saw that and said, all right, we got to have him on the lounge, especially with Gordon somewhere running around the slopes of the Alps, somewhere skiing.

So we needed some good content here, and Seth, right on the money. So I'm going to turn that over to you.

1:35

Fuel Price Spike

We're going to talk about your analysis. I just want to give everybody a few data points, a few backgrounds on what's going on in the oil market. I'm sure everybody's seen the headlines.

As always, it's just a good idea to timestamp where we are. It is, we're talking on Tuesday afternoon, New York time, about a little before 3 o'clock.

So obviously, particularly at a time like this, where fuel prices have been just flying up and down in an extremely volatile fashion. By the time you're listening to this, on Thursday or Friday, things may have changed.

But as of Tuesday anyway, oil prices have been, oil prices, fuel prices have been kind of trending down from their real big peaks over, let's call it during the weekend or yesterday, Monday. Just to give you some hard data.

So Airlines for America, which is the advocacy group for the US airlines, they have a good tracker on their website of Jeff fuel prices, average Jeff fuel prices for that US airlines are paying.

And they said on February 27th, the average price was $2.50 a gallon. Now, yesterday, again, this is Monday for us, was $3.67 a gallon. So you're talking about almost 50 percent increase, huge, huge spike.

And if you want to even go further back, in mid-December, the price was just $2 a gallon. So from $2 to $3.67, you can see why if you talked on Airline right now, and there's some panic in their voice, you don't know why.

And I'll just give one more without, you know, I don't want to overkill here, but IATA takes a more international look. And on their site as well, they have a jet fuel, what do they call it? Jet fuel analysis or jet fuel price monitor.

And I'm looking at it now. And it says for the week ending March 6th, oil price or jet fuel prices, sorry, on average, we're up 58% in just one week.

But one very important distinction that I want to point out here, oil prices in Asia, and they include Oceania in year two, Australia I'm sure is included in that, are up 77%. So 58% globally, but 77% in Asia.

Also, Middle East was the one that also had a big spike, 74%. So this can vary a lot by region for all sorts of different market reasons. But there you have it.

The industry is currently facing this oil spike. And what Sethlund did was take a look at the annual reports of the different US airlines. And I'm going to hand it over to you to kind of explain the rest and tell us what you found.

Yeah.

So thanks, Jay. Thanks, Meghna. Like I said before, I'm really happy to be on the lounge.

Check that one off the bucket list. It's very exciting. Hopefully you'll have it in the back.

Is it in the lounge or on the lounge?

On the lounge, in the lounge?

I mean, I don't know. It's in the lounge, I think.

It's in either one. Okay, it is on a podcast.

On a podcast in the lounge.

By the way, your point is great, Jay, that for very serious structural physical reasons, there are different oil prices in different markets because, well, it turns out US oil supply is not going to be that interrupted, whereas the ships that are

going to the Straits of Hormuz, many of them are going for Asia. If they can't sail, then the shortages will be much more acute in Asia-Pacific.

What we did was look at US airlines, so bear in mind as we do this, walk you through this analysis, this is for US airlines. But the reason why is twofold.

One, because they have really nice disclosures that the SEC mandates, and two, because I also think it drives home this point that this is a regional crisis with global implications, right?

So the point is not just to say, well, we know that Emirates is impacted, but it's to say, it's not going to be just Emirates, it's going to be everyone.

So what we did is in these big filings, SEC filings like the 10Ks and Qs, these large public companies are required to disclose risks and sensitivities, especially to really important commodity inputs.

So a lot of companies will disclose, if the dollar moves 10%, this will happen to us. Many of them will also disclose, if oil prices move 10%, this is what will happen to us. And that is of course what we are most interested in.

So we looked at, how many is it? We looked at eight major airlines, which will make up the majority of passenger service in the United States. All of them, United, American, Delta, Southwest, Alaska, JetBlue, Allegiant and Frontier.

That will pretty much, you don't need to be that much of a crack airline analyst, that will pretty much make up the full market.

We're missing a couple that are going through, spirits going through restructure and some of them are smaller, but that's the lion's share.

And all of them do in fact have a disclosure that says, hey, heads up, warning to investors, if oil prices move, we expect to lose this much money. And so a lot of them give it in funny terms.

One cent per gallon change in jet fuel or $1 per barrel change in jet fuel will lead to X millions of losses. Basically, we just went through, we looked at it and we said, well, like you said, Jay, jet fuel has changed quite a bit.

The airlines disclose their baseline prices on average. The average US airline paid $2.40 per gallon of jet fuel in 2025. It's currently trading at, like you said, $3.67.

It's like we've moved by $1.27. We can just take that $1.27 and apply it on top of, well, if you told me for every one cent per gallon of jet fuel, you're going to lose.

Delta Airlines says for every one cent move in jet fuel, one cent per gallon change in jet fuel, they will lose $40 million. Then it becomes a question of multiplication.

We added up the numbers and if there's a really important caveat here, but if the airlines flew exactly what they planned to fly, exactly the same route schedule that they had published that they wanted to plan in their 2026 plans, they said we would

love to fly this. If they actually followed through at today's oil prices instead of last year's oil prices, here is the punchline.

It would cost them an extra $24 billion in fuel costs to fly that route schedule that they had planned in their 2026 plans.

Yeah. Wow. Yeah.

So that's the punchline of the analysis.

There's a lot of important caveats and assumptions. We can get into it, but that's how we did it and that is the punchline.

Yeah. Seth has it broken down on the Skift website. I believe that's the easiest place to find it.

Then it's broken down by airlines. As you can see, American Airlines actually $6.4 billion in additional fuel costs from this spike. United about a little under $6, et cetera, et cetera.

So yeah, just serious money. And Seth, you make a very, very important qualifier here that obviously this is under the assumption that airlines are not going to do anything. Of course, they're going to react to this.

They're going to maybe park some planes. They're going to change their schedules.

And then of course, on the other side, not talking about costs here, but on the revenue side, they're going to do everything to try to raise fares, to maybe, you know, throw some more ancillary fees on there or whatever.

So this study, I think Seth would agree, this is not designed to, as a forecast, but it's to just understand the gravity of what this fuel price...

It's kind of, I mean, honestly, to give us a little bit of sticker shock, it's to put a number, this thing happens very far away, out of sight, out of mind. What does this actually mean here in America for a US airline?

Or, I mean, you can extrapolate this to Europe or to Asia, but the point is to say, we know, like I said at the stop, we know Emirates is going to be impacted by this.

But how much will United Airlines or American Airlines or Delta Airlines be impacted by this? If nothing happened, it would be huge. I think, look, if we just did the sensitivity analysis, American Airlines would lose almost $6 billion.

They only made something like four and a half, five, I think $4.7 billion in operating profit. Now, realistically, does this mean that United Airlines just lets this happen to them? I guess they're going to lose money now.

No, of course not. They will react to reduce routes or increase prices or potentially both. But I think it puts the magnitude of the problem.

Also, by the way, as I was writing this, oil was at $100 a barrel, and by the time I hit Publish, oil was at $80 a barrel. So there's also the fact that we don't know that it will stay at this level.

Go back and redo your work, Seth.

If I write a couple more articles, we'll get back down to $60 a barrel. So this is not a forecast. It's got a lot of assumptions, but it's meant to take this thing that feels abstract and translate it into dollar terms that we can understand.

Yeah, yeah, very good.

Meghna, I'm sure you've, I don't know if you had a chance to read it, but I'm sure you've been talking with Airlines and following this very closely as well. Any thoughts from your side?

Yeah, I mean, I think just even looking at today, it looks like the markets generally did decently well today and it seems like the price of oil might actually go down today whenever it is recorded at like 6 p.m. Eastern time.

I'm wondering what that means because it feels like there's a disconnect between how the market is reacting and then I think what's actually going on in the situation. So I'm wondering what that impact will be maybe for Airlines.

Yeah, with oil prices, I mean, I've just had been doing this long enough to know.

11:56

Airline Fuel Strategies

When anybody says, oh, I predict that oil prices could just, just cover your ears. Just don't pay attention. Go, go read a book or go, go listen.

Because yeah, it's just it's an impossible market to predict. It's just extremely volatile. And a lot of course depends on, we don't know unfolding events, right?

I mean unfolding military developments, unfolding political developments. And so we just, it's just impossible to say. And so it's very difficult.

And so Airline just kind of they're really a price takers, essentially, particularly the US airlines, because they're not hedged.

And some of the international airlines, Lufthansa talked about last week in their earnings call, how they are pretty aggressively hedged.

And they actually, they see this oil spike as being potentially advantageous to them because they'll be hurt less by some of their competitors.

They also said, hey, look, you know, our US rivals are unhedged, so they're going to be forced to raise prices and, you know, we'll just match. So, you know, those are not their words. Those are not Lufthansa's words.

Those are my words. But essentially, that's what they were saying. And so, yeah, I mean, this is, you know, different kind of hit different airlines in different ways.

But even, you know, an airline, Lufthansa, which might be the exception, the fact that they're very heavily hedged and that they are welcoming, you know, some fare increases, they still would not wish them this upon themselves.

I mean, nobody likes a fuel spike.

You know, the one, maybe rare exception is, you know, there are there are airlines that are based in very oil heavy economies and obviously won't, you know, count them, some of the Gulf economies right now because of other things that are happening

there on the revenue side. But if you're, you know, WestJet and Cowdry or, you know, United's Houston Hub or, you know, just some places like that that have big oil, you know, a lot of company, oil companies that are doing a lot of traveling, there

Well, you know, I think that's a great point.

I did this analysis. I posted it on LinkedIn and I got some comments and even some pushback because one of the takeaways I said was, look, and again, I tried to be very clear in the article, this is not a forecast, but you know how it goes.

But one of the things we said was, in order to cover this additional cost, there's going to be $24 billion of extra cost. What would that look like compared to the existing revenue base? You would need to raise revenue by like 10 or 11%.

And so one of the things we said is, if this stayed, if you flew exactly the same, and if this price stayed the same, you would need to see tickets fares rise by 10% to offset this cost.

And I had some people very helpfuly on LinkedIn, and I say that kind of jokingly helpfuly, but also seriously helpfuly, point out that like, yeah, like, look, not just our airlines' price takers on the oil side of things, many of them are price

takers on the fare side of things. And that ultimately, like, you know, the markets don't respond to your cost. This is not a cost plus contract. You're not a government contract where you get to say, I always get to have a 5% margin.

If there is less demand for flying because oil prices, and this was sort of the debate that was happening is actually could what we'd be seeing is demand destruction and would less demand for flying actually lead to lower ticket prices, which would

of course be really bad. And that's sort of the stagflation argument too, which is like prices go up and demand goes down at the same time. That's rough. So I don't know.

I think it's an interesting point to keep in mind is that, and you even open with this again, oil prices are going to be different in different markets, different airlines are going to have different cost structures, and they're also going to have

different demand curves across different markets, right? Like, I don't think Emirates is in a position to raise its fares, right?

Many of the Middle Eastern carriers for traffic to the Middle East is not going to be in a position to raise fares, even if their cost bases have gone up.

So I think another important caveat to this conversation is that we can quantify the costs, we can say how much you would need to raise revenue to preserve your margins at that cost, but the market's an interesting place.

You might have a competitor, like Lufthansa, who is 50% hedged and happy to undercut your inventory and take some market shares. So it's hard to say.

I also feel like this is maybe kind of analogous to what happened in 2022 when the Ukraine War broke out and then fuel prices went spiking then.

Although it does seem like that wasn't maybe as much of a crisis as it is now because we were kind of in that revenge travel period and airlines were able to raise their fare. It didn't seem like people minded too much.

I do wonder what will happen this time around because I feel like demand is still high, but not as high as it was during the post-COVID peak of 2022 and 2023.

Yeah. Great point. Meghna, make no mistake, 2022 was a rough year for airlines, for the airline industry and some of that was because the rebound from COVID was still underway and hadn't fully played out.

There was reasons for the industry distress that were tied more to the demand side, but still that caused that fuel spike was very painful.

It lasted, I'd have to look, but it was something like good four or five months where oil was over $100 a barrel or pretty close to it. It was a pretty extended period.

There are some different aspects to this crisis and that there's, well, just without getting into that, but for one, we have airports, like giant airports like Dubai, and it's essentially closed. So that's one.

But yeah, as far as oil spikes, yeah, it's not that airlines have never seen this before.

But I did see though that oil prices just this weekend, the actual increase, I don't know if this was for just a one-day increase, two-day increase, was the biggest spike ever in history. So that's somewhat unprecedented in that sense.

But yeah, who knows? We could all be, if this simmers down over the next week or two, three weeks, it may not wind up being as much of a cost shock as everyone's really worried about right now.

But certainly, it's definitely setting off some alarm bells for sure.

But I think it's a great point, Meghna. It's a great point on multiple levels. One, we've seen it before, but two, this time we're seeing it in what feels like a somewhat structurally lower demand environment.

And three, it's happened in a region that has major connecting traffic that basically is the, you know, there's like think supply and demand, right?

I think like Russia sent oil prices spike in, it curtailed potentially supply and flying the ability to fly and hit costs. But I don't know that it had major impacts on demand other than demand for flights to Russia, which was a niche market.

Whereas this could have a much bigger impact on demand because flights from London to Japan, London to, you know, I think we're going to do another like, your Maldives vacation relies on connecting in the Middle East and that's not possible right

now. On the other hand, and now we're really getting into politics, you can kick me off because I'm going to whatever, but, you know, Putin still fighting this war in Ukraine four years later, I think it's highly unlikely that, what's the saying,

taco, Trump always chickens out. I don't think that Trump will want to be doing this for, I mean, he won't be president four years from now, and there are people who would argue, but I don't think that if oil prices were above 100 bucks, that this

conflict would last for much longer. So I think that there's also this kind of taco put in place that can kind of help deescalate a little bit. So I don't know. I don't know, though.

I could easily be wrong.

I mean, he did tell CBS News yesterday that the war was almost complete, and then oil prices immediately started going down.

Yeah.

Yeah. Yeah, we never know. Now, of course, there's a whole lot of other things that can go wrong that are beyond any one person's agency, even the President of the United States.

What if it's not possible to secure the passage through the oil supplies, through those trade-off moves? I mean, that's, you know, that's it's not necessarily a decision that the President is going to make. It's a military objective.

It's a, you know, one that may or may not be able to be achieved. But that aside, yeah, and Seth, you're absolutely right. When you're talking about the impact on the cost side, Russia and this could wind up being vaguely similar.

But on the man's side, it's no comparison. I mean, the Russia shock was, it obviously, you know, there was airlines like Whiz Air that flew a lot to Ukraine.

Or like FinAir.

FinAir was heavily affected because they flew over Russian airspace. But yeah, it was very much, very modest in terms of the demand impact. But this is, I mean, you're talking about some of the busiest hubs in the world.

Can I ask you a question, Jay, and I hope it's not insulting?

Ask me at all.

Were you covering airlines during the 2004 through forever war in Iraq the first time around?

21:25

Historical Fuel Shocks

Very much so.

Yeah. Ask me anything about it.

Because oil was almost 150 a barrel back then. You don't necessarily inflation at just oil, but that was a different inflationary environment and it was oil at 150. The US did not have all the shale supply that it had now.

What happened to airlines then?

Well, I'll say a couple of things. In 2003 was when the Iraqi invasion happened, and that was a big demand shock for airlines.

I remember that happened right after, and again, sorry for the ancient history here, but you brought it up Seth because I'm old.

But remember that in 2000, I'll go even further back, the late 90s, the last couple of years of the 1990s, when oil prices actually hit $8 per barrel at one point, 1998, I remember I was working for US Airways at the time.

And that was a big bonanza for the US airline industry. And things really started falling apart in the year 2000 when we had a big oil spike. And that's what led, well, let's say started to lead to all the big bankruptcies that we saw that decade.

Delta in 2005, United in 2002, I think was a couple of years before that. And the, so you had the fuel spike in 2000. You had the Iraq war in 2003, so it was a demand shock.

Then you had the financial crisis in 2008.

And right before the demand crisis, which started in September of 2008 with the downfall of Lehman Brothers, one month before that, in August of 2008, oil prices, as you suggested, hit close to $140 a barrel.

And you're right, you have to inflation adjust that. So perhaps if you did the math, it would be very similar to that today. But that, in nominal terms, that was actually the highest that oil prices had ever gone.

And was it a disaster for airlines? You better believe it. I mean, it really was.

In fact, all these ancillary fees that you see today, like charging for bags, charging for a first bag, that was unthinkable. No one did that until about 2008.

Until that oil, 2007 maybe, until that oil spike was when American United first started breaking that taboo, is when they just said, this fuel prices are just so, so expensive that we have to do something beyond the pale.

We have to charge for our first bag, do these radical things. We have to charge for meals. We have to charge.

So that's where it all started. Makes you wonder if you do have another persistent.

What could come next?

Are they going to do something radical? Again, now one big difference.

Those cattle car stand-in-room only seats that Ryan Ayer always threatens, maybe this is the-

Don't give Mr. O'Leary any ideas. But yeah, and I'm giving you a long answer than you probably wanted here.

But the other thing I was going to say, there is a big difference between now and then.

I think airlines in the US, particularly, I'm talking about the US now, they are structurally healthier, structurally more able to ground aircraft, to raise fares because of consolidation, there are fewer players.

So I think they'll be less likely to do anything too radical. But, you know, oil goes to $200 a barrel and all bets are off. You know, maybe you will be standing on your next flight, Seth and Meghna, so be ready.

Oh, that doesn't sound too great.

Would you do it for a really cheap fare, you know, one or two hour?

Yeah, yeah, was it $10 fare or whatever?

You know, when I was younger, probably.

It has to be like really, really cheap.

It has to be like dirt cheap.

Yeah, I bet that, you know, people like O'Leary always says, you know, people would crawl over, crawl naked over broken glass to get a low fare. I bet that if prices were cheap enough, people would do it.

Well, I hope it doesn't come to that.

I think the lesson that I'm hearing from you though, Jay, is that what happened last time around was a lot of bankruptcy, but also a lot of, I hate to call it innovation, but also a lot of critical thinking about business models and revenue

strategies. So hopefully we don't get back there this time around, but I think that's going to be like what might happen again if we see oil stay very high for persistently long with Gulf War III.

Yeah. So we'll pause there for a second. When we come back, we'll continue to talk maybe a little bit about this, but we'll also pivot and talk about some of the fallout from the, or implications of the government shutdown in the US.

Before we head into the break, we're joined by a Skifter that you might not be so familiar with, and that's Adam Stacey.

He's a Senior Editorial Event and Awards Producer. Whoo, that's a big title. And he's currently working on the Skift Idea Awards.

Adam, welcome to the Airline Weekly Lounge.

Thank you very much. Glowing introduction.

For the benefit of listeners who aren't familiar with the idea awards, what are they all about?

Yeah, so, Skift Idea Awards, we're just moving into our eighth year. So the awards were launched really to recognize and celebrate the most impactful ideas across travel, just the entire ecosystem.

But I like to think of them as the travel industry's innovation benchmark. You know, we all know we're at the pivotal moment of transformation for the industry, structurally, technologically, operationally.

And these are awards about spotlighting the companies and leaders who are actually driving that change.

So, you know, I'm talking about things like advancements in customer experience, AI, digital transformation, sustainability, product design, all that good stuff. And what's important with the awards as well is that it's not necessarily about scale.

So we're open to everyone because our focus is about impact. So we see submissions from startups, mid-size players, global brands, you know, individual leaders. I was like to think innovation doesn't correlate with the size of the company.

It correlates with the execution and the results that they are putting out and that's what we are recognizing with these awards.

Totally agree. Sometimes it helps if you're a little bit more nimble, a bit smaller. You can be a little bit more disruptive than a very large corporation.

But what would you say, Adam, to an Airline Weekly Lounge listener who says, that all sounds great, but where do I fit in?

Yeah, and I'm not an airline expert, so I'm not going to tell people what to do. But I think for this audience, we have an obvious category, which is airlines and airports is specifically designed for that industry.

That could cover anything from carbon innovation, distribution strategies, emerging advanced aimability. We're seeing all this stuff with flying taxis and this crazy stuff. But we also have categories specifically for technology.

So this industry specifically is deep into AI deployment. We're focusing on revenue optimization, workforce planning, retail transformation, data-driven personalization, and sustainability as well.

That's another area where this industry is focused on. So fleet strategy, emissions tracking, new planes, all that stuff.

So we're looking for initiatives really that just demonstrate tangible progress and the bettering the experience for the end user and the industry as a whole.

Sounds great. And if anyone's still unsure, I believe you've got a quiz as well.

We do. We do. Our marketing team, I like to call them the best in the biz.

They've come up with a quiz that you answer a couple of questions and the quiz will tell you basically which categories are the best fit. Amazing.

One new thing we've launched this year is where is that you can actually download a sample form before you submit.

So if you're entering on behalf of a client maybe, or you're not quite sure what the submission forms looks like, you can just download a PDF sample and take a look in advance.

Super, super helpful. Okay. You've got everyone interested.

What is the call to action? Where do they go next if they want to apply or learn a little bit more?

Yeah. So the next step is to just head to the website, which is hosted on live.skift.com, and then you just follow through to ID Rewards. As you mentioned, we've got a quiz.

You'll find all of the categories, the sample PDFs, judges, previous winners, if you're curious to see who was made in the past, and all of the relevant timelines. The submission process is very straightforward and streamlined.

It's all done remotely via our online system. You can buy now at the lowest rate and continue to edit up until the entry deadline in July. There's no huge time commitment there.

One thing I would say is even if you're unsure about whether your project or initiative will qualify, it's worth exploring.

From speaking to past winners, some of the most compelling have come from projects that they didn't think would be a good fit, and then they've gone on to win. If you've got a smart solution that solves a real-world problem, take a look.

We'd love to hear from you. Fantastic. Yeah, sounds great.

Thanks again for coming up to the show, Adam and telling us all about it. I can speak for myself for the Global Forum in New York last September. We got to see for ourselves many of the IDEA Awards winners and they are from right across the industry.

It's not always who you might expect. Do check that website, ourlifedoskift.com, where you find all the details for the IDEA Awards. Just scroll down to the bottom of the page, you'll get all the info there.

Thanks to Adam for joining us on the show, and listeners hang around, because we'll be talking IAG right after this short break.

Okay, we're back.

31:11

Government Shutdown Effects

Thanks, Seth. Thanks, Meghna, for that great discussion on Jet Fuel. Anything to add about any of the fuel implications or anything that you wrote in your article or any questions you had, Meghna, on any of that?

I think the only other thing worth noting is, I think we'll get a clearer picture of what's going on probably next week during the JPMorgan Industrials Conference, where all the major airline CEOs are speaking, and I assume airlines will have to

release some sort of guidance ahead of that conference too. So I think we'll start to see what's really going on.

We're going to learn a lot from that.

Just so everybody knows, next week, I don't know if you have the dates in front of you, we can probably Google it, but it's Tuesday, Wednesday next week, JPMorgan Chase is going to be hosting a big investor event, not just for airlines.

I don't know if it's a transportation event or whatever. Whatever the big title is, but all the big US airlines, I think, are going to be there, and they will disclose a lot.

We'll certainly in Airline Weekly have a lot of discussion and information about that. So, yeah, tune in to that if you want to know more about what US airlines are experiencing right now, what they're thinking right now.

But we've also, in the meantime, we have this government shutdown. And I know, Meghna, you've been following that very closely. So if you want to tell us what is going on and what are the implications.

Yeah.

So I guess it seems like these past few weeks have generally been pretty chaotic time to travel, I think, just now given the war and the fact that we've had this partial shutdown that has pretty much shut down all of Department of Homeland Security

with the exception of a few agencies like ICE. Basically, TSA agents have been going to work, not getting paid. This past week was the first time that they missed their paycheck. They did receive a partial paycheck in February.

But now we're getting into that territory where they're missing paychecks and now we're seeing staffing shortages and lines at many airports across the country are really starting to pile up.

I think Houston's Hobby Airport had a four-hour wait time on Sunday. The New Orleans airport, the line was stretching to the parking garages for security.

It's getting pretty tough and I think this is also happening right during the spring break travel season, which is supposed to be a record travel season for the airlines right now.

Yeah, that's an important point right there. It's not all of these government shutdowns or airport disruptions are created equally. I mean, it really does depend a lot on the time of year, right?

Like when the last one that happened in, was it October?

October, November.

October into November, right? It's, you know, I guess that's a reasonably busy time, but like you said, I mean, this is spring break. So, you know, if you're growing Arizona, Florida right now, the airports are usually jam-packed.

So, not a great time. You just scared me there, because I'm actually flying to Houston on Monday. Not Hobby Airport, but I hope, wish me luck there.

I hope maybe it'll be settled by then, hopefully. Have you heard anything about, yeah, what is the likelihood that it could be settled anytime soon? Have you heard any political updates on that side?

Congress won't getting close to anything?

No, it seems like it's on track to get even worse.

34:36

Shutdown Outlook

I think the lines of the airports, I think Houston is advising for both Bush Shifter Continental and Hobby to arrive at least three to four hours before your flight, which is quite early. I think even New Orleans was advising that as well.

So it seems like these lines are probably only going to get worse. And I don't even know what it's going to be like if TSA agents missed their second paycheck.

I think even from their perspective, this is the second government shutdown they've had to deal with in a not very long amount of time.

Because also, you know, they were part of government shutdown in October, went into November, that was the longest shutdown on record, and they weren't getting paid then either.

So I think it's going to be quite chaotic at many airports across the country. I mean, I will say though, so far in the New York area, it seems like the wait times are pretty normal right now.

And it hasn't gotten out of hand, but in other parts of the country, it just seems to be worse. So I think it just varies on a case by case basis. And it's also worth noting that Global Entry is still suspended as well.

So if you're traveling internationally and you have Global Entry, you're not going to be able to use that. And that has also been leading to some bottlenecks at Customs.

Wow. All these, so much good news out there. For air travelers and the world at large.

Well, yeah, thanks for that, Meghna. And yeah, the government shutdown last fall definitely did have an impact on airline profitability, for sure. I think there were a couple of airlines that quantified that.

I can't remember off the top of my head who or how much, but that is, you know, these are definitely, it's not trivial for airlines, particularly when they, you know, last long. When did this start?

Do you remember when, how long has this been going on?

Almost a month. It started February 14th. So now we're hitting the 1st of March.

Yeah.

And then for a while, it wasn't really that much of an impact because people are still getting paid, right? The TSA.

Yeah, they got a partial paycheck at the end of February, but now they're like kind of running on nothing. So I think you can probably just expect more staffing shortages at many airports.

Like the longer the shutdown continues, then it doesn't seem like Congress is close to achieving any sort of deal.

And this time the air traffic controllers are not involved. Is that correct? Are they still getting paid?

They're still getting paid.

I think last time the shutdown was so bad on air traffic controllers that I think now there's also more of like an awareness on like Congress' part about that.

Because there is like a bill there right now that would, that if it got passed, it would allow air traffic controllers to be paid during future shutdowns.

But there are also some concerns in Washington that maybe passing such a bill might not be fair to the other workers that are impacted by these shutdowns.

I think like in the last round, the TSA part was pretty under reported, but they were also working during that shutdown and not getting paid. I think this is just even worse this time around because it's a partial shutdown.

That's some specifically, and the last shutdown ended in November, then in February they have another one. So I can't imagine that's like good for morale among TSA agents or even recruiting TSA agents.

Yeah, and it's who knows, I mean, this could even be extended into the summer, which is the real big booking period for a lot of airlines.

I mean, particularly if you're flying some of these East-West transcontinental routes, summer is the big game there. So yeah, you wonder how much demand is going to be affected, especially now that the agents are not receiving paycheck. So great.

Yeah, thanks for that, Meghna. That was a good update on another important issue, another challenge for the airline industry. Hopefully, we'll have some brighter and cheerier news to discuss next week and in future weeks.

But for now, thanks, everybody, for joining us. And be sure to read our latest issue of Airline Weekly coming out on Monday. We'll have all the latest and greatest news and developments from across the world aviation industry.

So thanks again and have a good week.