Airline Stocks To Take Off? FAA Lets Airlines Resume Regular Operations After Lifting Flight Capacity Restrictions
- The staff shortage forced the FAA to issue an emergency order limiting capacity, with flight reductions starting at 4% and later rising to 6%. The FAA reported six staffing triggers on Friday, eight on Saturday, and only one on Sunday, compared to the record 81 on November 8. According to FlightAware data, 156 flights were canceled on Sunday and 315 on Saturday. About 5,163 flights were cancelled across U.S. airports last weekend.
Airline stocks were in focus after the U.S. Federal Aviation Administration (FAA) said U.S. carriers can resume normal operations on Monday, following an improvement in staffing, as the longest shutdown in U.S. history came to an end.
The FAA said airlines could resume regular schedules from 6 a.m. as the agency's safety team recommended the termination of the order following their“detailed reviews of safety trends and the steady decline of staffing-trigger events in air traffic control facilities.”
Why Was Flight Capacity Cut?
During the 43-day shutdown, controllers worked without pay, and some opted to call in sick, while others took on second jobs to sustain themselves. The staff shortage forced the FAA to issue an emergency order limiting capacity, with flight reductions starting at 4% and later rising to 6%.
The cuts were initially set to rise to 10% before the FAA froze them at 6% and then reduced them to 3% by the weekend, as the shutdown ended on November 12. According to FlightAware data, 156 flights were canceled on Sunday and 315 on Saturday. About 5,163 flights were cancelled across U.S. airports last weekend.
What Did The FAA Say?
The FAA reported six staffing triggers on Friday, eight on Saturday, and only one on Sunday, compared to the record 81 on November 8.
“I want to thank the FAA's dedicated safety team for keeping our skies secure during the longest government shutdown in our nation's history, and the country's patience for putting safety first. Thanks to President Trump's leadership, controllers have returned to their posts and normal operations can resume,” said Transportation Secretary Sean Duffy.
Last week, U.S. President Donald Trump said he was "NOT HAPPY" with controllers who failed to show up. "All Air Traffic Controllers must get back to work, NOW!!! Anyone who doesn't will be substantially 'docked,'" he said in a Truth Social post. He also warned that any controllers who wanted to quit would not receive any“payment or severance of any kind!" and would be "quickly replaced by true Patriots."
What Are Stocktwits Users Saying?
Retail sentiment on Stocktwits about Delta was in the 'bullish' territory, while traders were 'bearish' about rival United Airlines.
Last week, Delta CEO Ed Bastian warned that the U.S. government-mandated flight cuts would result in“significant” costs. The resumption of normal operations comes in time for the Thanksgiving holidays, which are among the busiest for U.S. carriers.
Delta stock gained more than 1% last month, while United shares were over 2.5%.
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