United, Delta admit worries over impact of government shutdown

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Updated 17-01-2019, 10:45 (UTC+2)            

Since the partial U.S. government shutdown began on December 22, 2018, most of the attention has been focused on federal employees, including air traffic controllers and Transportation Security Administration (TSA) agents. And yes, the economy. But as the shutdown drags on, major U.S. carriers are hemorrhaging too: their aircraft, new routes and tickets sales are stalling. And it seems like they are getting a little worried.

The situation on the ground is this: since many Federal Aviation Administration (FAA) officials have been furloughed, some of U.S. airlines’ plans on new routes, such as Southwest’s new service to Hawaii, as well as brand-new planes, like the introduction of Boeing 737 MAXs, have been put on hold, delaying commercial operations.

“…if the shutdown continues more aircraft may be impacted,”  – United’s spokesman

The distressing warnings and loose projections on the impact of the government shutdown on the U.S. airline industry’s growth have been heard far and wide. But here’s the reality: aside of the delayed aircraft, the U.S. government shutdown is expected to cost Delta about $25 million this month in lost business due to weaker demand and less travel by federal employees and contractors, the airline’s CEO Ed Bastian was reported as saying by Bloomberg on January 15, 2019.

American Airlines

Big bird American Airlines (A1G) (AAL) has recently taken delivery of two new Boeing 737 MAX 8s out of the total 16 scheduled for delivery in 2018. The planes, registered as N350RV and N341RW, arrived at American’s maintenance base at Tulsa International Airport (TUL), Oklahoma, on December 26 and 31 respectively. They are still unable to fly: airlines need federal safety inspectors to debut new aircraft.

“We have taken delivery of two MAX 8 aircraft since the shutdown began. Both planes are in Tulsa awaiting FAA approvals required before operating in commercial service,” American Airlines (A1G) (AAL) confirmed to AeroTime on January 15, 2019, adding, “We continue to monitor the situation, and are closely working with our federal government partners.”

To date, a total of 20 MAX 8s have been delivered to American and it is set to receive another 20 this year, as part of 2013 order for 100 of the MAX family jets. The airline says it does not expect the certification delay of its two new 737s to have any impact on its flight schedule or customers, Reuters reports. The top U.S. carrier operates a massive mainline fleet of 954 aircraft.

United Airlines

United is also left hanging with two jets that it is unable to debut to the public. A spokesman for the airline confirmed to AeroTime that the company currently has one Boeing 737 MAX 9 as well as one used Airbus A319 awaiting for the FAA to re-open so that they could enter into service. Seems like a needle in a haystack, since United operates at least 770 mainline aircraft, right?

“At this time, there has been no impact to our operations from these two aircraft waiting for certificates; however, if the shutdown continues more aircraft may be impacted.” the spokesman stated on January 16, 2019, echoing the fears expressed by other major U.S. carriers. United’s CEO Oscar Munoz himself has now spoken out saying the airline is “worried” about the prolonged government shutdown, despite the impact on the carrier being not “significant” as of yet, CNBC reports.

The Chicago-based carrier has a total of 136 MAX family planes (models 9 and 10) on order. Having taken delivery of its first MAX in April 2018, the carrier said it expected to have 10 737 MAX aircraft in its fleet by the end of that year.

Also in April of last year, United signed an agreement to purchase 20 used A319-100s to cover for short-term fleet needs. These aircraft are scheduled to be delivered in 2020 and 2021, although the carrier has not disclosed the planes’ source. United currently operates 71 A319 aircraft, as Airbus orders and deliveries book indicates.

Delta Air Lines

Delta Air Lines is also awaiting FAA certification of new aircraft, although the carrier has not disclosed much on the topic. According to CNBC, the U.S. no. 2 airline had scheduled a January 31, 2019, launch of its brand-new Airbus A220 and is now probably biting nails to see the FAA’s services restored as soon as possible. So far, the carrier has taken delivery of four A220-100s, the first one (N101DU) just at the end of October 2018.

The fears were confirmed by Delta’s CEO Ed Bastian who told industry analysts and reporters on its fourth quarter 2018 earnings call on January 15, 2019, that the debut date of its A220 will likely be “pushed back” as the certifications of new aircraft types cannot be completed amid the government shutdown, the Business Insider reported.

“Delta continues to monitor the situation and will work with the FAA to ensure that the A220 is fully certified when it enters our fleet,” spokeswoman for the airline told AeroTime on January 17, 2019.

But that is not the only fleet milestone facing delay of entry into service. According to Delta’s COO Gil West, speaking during the earnings call, the certification of Delta’s incoming fleet of A330-900neo widebodies could also be affected. The Atlanta-based carrier has ordered 35 of these aircraft that are expected to be delivered later this year, making Delta the first U.S. airline to operate the A330-900neo. It also has an order for 100 A321neos for its narrowbody fleet renewal, deliveries of which are set to begin in 2020.

Delta’s first Airbus A220 aircraft (Delta, CC BY 2.0)

Delta had in fact provided a lifeline for the rather slow-selling A220 when it placed an order for 40 A220-100 jets back in 2016 (at the time, they were still Bombardier C Series). With this, it became the first U.S. airline to take delivery of an Airbus A220. Most recently, on January 9, 2019, Delta announced extending Airbus order with 15 more aircraft, opting for the larger variant, and converting some of the previously ordered jets to A220-300. The order now stands at 90 A220 aircraft.

Southwest and to Hawaii

The low-cost carrier Southwest is awaiting FAA’s approval to begin its much boasted about service to Hawaii. Having first announced the new service in October 2017, the airline had initially hoped to start selling tickets (offering lower fares than currently in the marketplace) by the end of 2018, Hawaii.com reported at the time.

Although things got pushed back a little, before the government shutdown was put in place, the Southwest seemed most confident about its plans for the new service. “Hawaii forecasts very well for us. We have, obviously, no thought of deviating from our plan,” CEO Gary Kelly was quoted as saying by Bloomberg last December.

Southwest is believed to have been at the final stages of receiving certification for extended flights over water or ETOPS, a regulatory requirement necessary to operate between the mainland and the Hawaiian Islands. The carrier’s management was expecting to complete the process by end of January 2019, launching the long-awaited service in the first quarter of the year, Beat of Hawaii reported.

However, now it appears authorities that oversee ETOPS authorizations are absent due to government shutdown. ”Southwest is ready for next phases in our Extended Operations (ETOPS) application process: tabletop exercises and validation flights. Yet the groups within the FAA that oversee those activities are on furlough as a result of the lapse in agency funding, and our next steps require their direct participation and oversight,” a spokesman for the airline told AeroTime on January 17, 2019.

“We’re grateful to have received FAA approval of both our manuals and proposed procedures for ETOPS prior to the government shutdown, and we are ready to continue the ETOPS application process when the FAA is allowed to fully resume certification activities,” the statement ends.

Southwest plans to deploy its Boeing 737 MAX 8s on the new Hawaii service (Tomás Del Coro, CC BY-SA 2.0)

This should certainly come as a setback for the Dallas-based carrier, who has jumped in on the wave of launching new services to the islands of Hawaii.

Last December, Alaska Airlines began nonstop service between Sacramento, California, to the Island of Hawaii. Southwest also has a large presence in California and, according to BizJournals, could begin its Hawaii flights from four cities in the state: Oakland, San Diego, San Jose, and Sacramento.

The carrier would also eventually launch interisland travel, a move that would cut Hawaiian Airlines’ monopoly in the islands, Beat of Hawaii points out.

Although the budget carrier has no new timeline as to when it will be offering service to Hawaii, it says it is preparing “internally” USA Today writes, and is ready to start selling tickets and launch flights as soon as FAA signs off on the new route, which it would serve using its 175-seat Boeing 737 MAX 8 airliners.

Southwest was the launch customer of the 737 MAX 8 in North America, having taken delivery of its first MAX 8 (N8710M) in August 2017. The carrier has the largest fleet of Boeing aircraft in the world. Southwest operates an all-Boeing fleet that consist of around 750 aircraft: a range of 737 models.

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Ruta Burbaite
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